Tax Rebate

In 2004, Hungary was among the first countries to introduce a continually developing tax rebate system attracting an ever growing number of foreign productions shot in the country.

 
 
 

HUNGARIAN TAX REBATE FOR FILM PRODUCTIONS

  • Films (for cinema and television) produced in Hungary are eligible for a 30% rebate based on their expenditure (all the direct film production costs) emerged in the country.

  • The scheme is part of the film support programme approved by the European Commission until 31st December 2024.

  • The incentive is available through local business companies who receive tax relief after their support of films or through the Collection Account operated by the Hungarian National Film Institute.

  • The incentive is guaranteed by the Hungarian state through the Collection Account. The financial support is provided in the form of a cash refund (post-financing).The incentive is up to 30% of the eligible production expense (Hungarian or non-Hungarian). The non-Hungarian eligible spend is capped at 30% of the Hungarian eligible spend. See the detailed presentation below!

 
 
 
30% Hungarian Spend Non-Hungarian Spend Basis of the tax rebate
(max 125% of the Hungarian Spend)		 Tax rebate (30%)
Example 1 1000 0 1000 300
Example 2 800 200 1000 300
Example 3 600 400 780 204
 
 
 
 
 

WHAT PRODUCTIONS CAN BENEFIT?

  • Films of all genres made for cinema release.

  • Feature films, series, documentaries and animations made for televisions or other distribution platforms.

  • Porn and extreme violent films, commercials, reality shows and daily soap operas are excluded.

 
 
 
 

CULTURAL TEST

  • Films applying for the incentive have to be submitted to a cultural test.

  • Films must contain European content or cultural values and additional points are granted if EU nationals are either making or financing the movie (point system).

  • 16 points have to be earned to pass

 
 
 

REGISTRATION OF COMPANY PRODUCTION

  • Hungarian companies, registered with the National Film Office (NFO) are eligible to apply.

  • Foreign companies should conclude coproduction or service agreements with Hungarian registered company.

  • Production has to be registered at NFO.

  • Start of filming has to be reported to NFO.

 
 
 
 

  • Corporate-tax-paying domestic companies that may reduce their tax payable and tax base by the financial support they provide (double write-off) - a maximum of 7,5% incentive available.

  • The financial support is provided in the form of a cash refund (post-financing).

  • Film producing companies can request the support from the custody account of the Hungarian National Film Institute (it may charge a maximum administration fee equal to 2.5% of the subsidy granted).

WHO PROVIDES THE FINANCIAL SUPPORT?

 
 
 
 

ELIGIBLE EXPENSES

  • All the direct film production costs are eligible except those excluded by the film law; other costs are limited by the law (see below).

  • The producer is free to spend 20% of the budget outside Hungary without suffering a reduction in the amount of the incentive. This means that not only the spend made to Hungarian taxpayers will qualify, but also some of the services provided by foreign taxpayers - up to 20% of the total production budget (consequently 37.25% of the Hungarian spend will be refunded).

 
 
 
 

EXCLUDED OR LIMITED COSTS

  • Part of copyright costs over 4% of the budget.

  • Travel costs are limited to trips from and to Hungary, stopover possible.

  • P&A is limited up to 2% of the budget (but max 10m HUF).

  • Cost of services delivered by non-Hungarian sub-contractors limited up to 30% of eligible Hungarian spend.

  • Producersʼ fee maximum up to 4%.

  • Expenses, where date of the certificate of completion falls out of the production period or it is issued later than 3 months from the end date, are excluded.

  • Any expenses settled by compensation (products or services) have to be excluded.

  • Any costs related to a film produced about an event, are limited to the expenses incurred regarding the production, and not the event. If costs cannot be separated, all expenses should be excluded.

 
 
 
 

HOW MUCH IS THE INCENTIVE?

  • Up to 30% of the eligible production expense (Hungarian or non-Hungarian).

  • The non-Hungarian eligible spend is capped at 30% of the Hungarian eligible spend.

 
 
 
 

AID INTENSITY PROVISIONS TO TAKE INTO ACCOUNT

  • Total state subsidies shall not exceed 50% of the production budget, or

  • In case of co-productions, 50% of the Hungarian contribution or 60% of the Hungarian contribution, if the co-production involves a co-producer from another EEA Member State too

  • In case of low-budget films, “difficult” audiovisual works and films produced in Hungarian language, the extent of subsidies is 100% of the budget or the Hungarian contribution.

  • In case of documentaries, animation, shorts, experimental films etc. - 100% of the budget or the Hungarian contribution.

 
 
 
 

OTHER ADVANTAGES

  • Experienced crews

  • Languages spoken

  • Well equipped new studios – sound stages

  • Variety of filming locations

  • Post-production facilities and expertise

 
 
 
 

IS PRE-FINANCING POSSIBLE?

  • Certain banks are willing to pre-finance state subsidies and VAT.

  • Depending on the bank and the individual contract they keep a percentage from the 20% (meaning the actual rebate will be about 16%).

  • Deal with NFO for monthly or quarterly accounting.