Are tax credits in cinema the next safe and convenient alternative investment? If so, how can we take advantage of this opportunity and support Italian film at the same time? All of this is going to be explored by the panel at the “Investimenti alle stelle. Il tax credit nel cinema come asset alternativo” [Big-screen investment: tax credits in cinema are the new asset alternative] seminar, which is being heled on 11 April at 9:30 at Milan’s Salone del Risparmio (Mico, via Gattamelata). Moderated by Luca Dini, the editorial director of Condè Nast Italia, and Andrea Cabrini, the co-director of Milano Finanza, the discussion will touch on issues such as investment in the intriguing world of cinema, approaching the issue from the perspective of investment performance and tax benefits. Raul-Angelo Papotti, a partner at Chiomenti, will be taking part in the talk, while there will be a special guest appearance from Pierfrancesco Favino, who will tackle the issue from the perspective of an actor and producer.

Tax credits in cinema: what is it and how does it work?

So what is this tax credit all about? In the 2008 Budget, the government introduced a series of significant tax benefits for operators in the film industry in an attempt to support the crisis-hit sector. The move applied to producers, distributors and owners, but also to any external parties wishing to invest in film production or distribution.

On 1 January 2017, Law No. 220 of 14 November 206  introduced a new film and audio-visual reform which completely revolutionised the legislative framework applicable to the sector. The reform redefined the incentives and benefits (not just limited to tax) in place to support the sector, thus strengthening the tax credit scheme and introducing an extraordinary plan to boost the cinema circuit and digitalise Italy’s cinema heritage.

Tax credit in cinema: how it works

Thanks to the fiscal benefits of the tax credit scheme, people and companies who derive business income from investments in the production or distribution of Italian film will receive a tax credit for monetary contributions made in the form of contracts of association relating to partnership or profit-sharing. The tax credit can be worth up to 40% on a maximum of €1 million per tax period and can be used to offset tax debts, social security contributions and insurance payments.

However, in addition to the tax credit, which is immediately returned to the investor, the tax credit also entitles them to a percentage of the profits deriving from the economic exploitation of the film.

Distribution companies, meanwhile, can access a tax credit of between 15% and 30% of the overall costs of the national and international distribution of Italian film and audio-visual products (previously the limit was set at 15%).