Film Tax Incentive


Lithuanian Film Tax Incentive came into effect in January 2014 as a new policy measure to foster local and foreign film production in Lithuania.

As of 2019 Lithuanian Film Tax Incentive offers an opportunity to save up to 30% of the film production budget through private investment scheme.

How it works?

As a foreign filmmaker you have to cooperate with one of the local production companies that will submit the application. The local company will take a responsibility of finding a local film donor willing to invest up to 30% of your production budget in exchange of a reduced corporate income tax.

The process is explained in the scheme below:

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Who benefits from this scheme?

Everyone.

Film production companies get a financial aid for filmmaking in Lithuania if their production meets eligibility requirements and they comply with the formal procedure approved by Lithuanian Film Centre.

Private donors in return can deduct the amount granted for filmmaking process from their taxable income. The estimated net profit for the donor participating in the scheme is up to 11,25%.

ELIGIBILITY

The incentive is available for the production of feature films, TV dramas, documentaries and animated films. It includes domestically produced, co-produced or commissioned films (produced under the service agreement). At least 80% of eligible film production costs must be incurred in Lithuania and the total amount of eligible spend in Lithuania has to be no less than 43,000 EUR.

INELIGIBLE COSTS ARE THE FOLLOWING:

  • Costs of a consultation concerning the preparation of the application, and costs of the preparation of the application;
  • Fines, penalties, litigation costs;
  • Acquisition of fixed assets, construction, reconstruction costs if they are unrelated to the production of the film;
  • Travel costs when the Republic of Lithuania is not the place of arrival or departure;
  • Development costs;
  • Film promotion and marketing expenses;
  • Film distribution costs;
  • Payment for actors (if the payment exceeds 4% of the production costs of the film or its part).

Film Tax Incentive is only available for films that meet the approved production and content requirements. Pornographic production and films promoting violence are not considered for the Film Tax Incentive.

CULTURAL CONTENT CRITERIA:

The film cannot be pornographic, incite violence or hatred. It has to meet at least two of the following criteria:

  • The script is based on events that are part of Lithuanian or European culture, history, mythology, religion;
  • The film reflects events of Lithuanian or European social life or politics;
  • The film tells about a well-known figure related to Lithuanian or European culture, history, religion or society or a mythological character;
  • The script is based on a culturally significant work of Lithuanian or European literature;
  • The film builds on important Lithuanian or European values: diversity of cultures and religions, human rights and civic awareness, democracy and solidarity, minority rights and tolerance, respect for cultural and family traditions;
  • The film focuses on issues of Lithuanian or European identity
  • The film is set in Lithuania or Europe.

PRODUCTION CRITERIA:

The film has to meet all of the following production criteria:

  • The production is not a promotional film, advertisement, unscripted entertainment (e.g., a game show, reality show, talk show, talent show), a music video, a computer game or a television series;
  • At least three days of shooting take place in Lithuania in the course of the production (except for animation projects);
  • At least 20% of an animated film’s production costs in Lithuania must be incurred for producing two of the elements listed below:
  • Shooting (if it is required by the script);
  • Characters and/or backgrounds design;
  • Layouts and/or storyboards;
  • Visual effects;
  • At least 51% of the crew hired by the Lithuanian production company are citizens of Lithuania or citizens of other European Economic Area (EEA) countries.

 For more information, please contact Irma Šimanskytė i.simanskyte@lkc.lt