How it works
Lithuanian Film Tax Incentive came into effect in January 2014 as a new policy measure to foster local and foreign film production in Lithuania.
From 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.
More about the application process: Desciption of the Evaluation Procedure
The process is explained in the scheme below:
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.
CULTURAL CONTENT CRITERIA:
A film is considered to meet the criteria for cultural content evaluation if it fulfills at least two of the criteria listed:
- The film’s script is based on themes (or motifs) from the culture, history, religion, or mythology of Lithuania or other European country (-ies);
- The film depicts events from the social or political life of Lithuania or other European country (-ies);
- The film tells the story of a notable figure from the culture, history, religion, society, or mythology of Lithuania or other European country (-ies);
- The film’s script or main theme is based on a significant literary work from Lithuania or other European country (-ies) or on an artwork from another cultural field (such as painting, music, film, architecture, or a computer game);
- The film embodies important values of Lithuania or other European country (-ies): cultural and religious diversity, human rights and civic responsibility, democracy and solidarity, minority rights and tolerance, respect for cultural and family traditions;
- The film addresses issues of national or European identity;
- The action in the film takes place in Lithuania or another European country (-ies);
- The film creates artistic value within the context of cinematic art (e.g., originality, lasting significance, aesthetic qualities, subjective vision, the director's style).
A film is not considered to meet the criteria for cultural content evaluation if:
- It is an advertisement, promotional video, television program, reality show, lifestyle show, music video, video game, or a series characterized by certain character archetypes and dramaturgical rules that allow for infinite continuation without creating artistic value;
- the film is promoting violence or pornographic;
- the film incites hatred;
- the film spreads disinformation, war propaganda, incites war, or calls for the violation of the sovereignty of the Republic of Lithuania by attempting to change its constitutional order, undermine its independence, or violate its territorial integrity;
- the film promotes or incites terrorist crimes;
- the film promotes and/or advertises the use of narcotics, psychotropic substances, or other psychologically addictive substances, as well as psychological addiction to gambling;
- the film contains information that defames, insults, or degrades a person’s honor and dignity;
- the film contains information that violates the presumption of innocence.
PRODUCTION CRITERIA:
The film has to meet all of the following production criteria:
- Total amount of eligible spend in Lithuania has to be no less than 43,000 EUR;
- 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;
- 2D, 3D, stop-motion, stop-motion and other forms of animation production;
- 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: Deimantas Saladžius, d.saladzius@lkc.lt.
