The cinema tax credit is an investment in a product that can work. And well. Like every other investment, however, it is fundamental to differentiate the portfolios. And not only this. Aside from refining the regulation, the legislature needs to intensify controls: “In the past, some scammers submitted an application to the Ministry, which did not check it: and instead of investing in culture, they took off with the money to not pay taxes,” explains Raul-Angelo Papotti, partner at the Studio legale Chiomenti law firm. Now, with the Franceschini decree, the regulation has become more stringent. And if the asset was able to work in the past, today it is transformed into a veritable opportunity.

This is what emerged during the Investments in the stars. The cinema tax credit as an alternative asset conference organised by Tendercapital during the Salone del risparmio investment management event held on 11 April. The event featured Italian actor Pierfrancesco Favino, who was interviewed by the Editorial Director of Condé Nast Italia Luca Dini, along with Andrea Cabrini, Class CNBC Director, and Raul-Angelo Papotti. “We wanted to tackle a topic a bit out of the ordinary for the sector, an asset that could be combined with culture. Tender Capital is linked to art. In thinking about art, we selected the world of cinema: how can it be combined with an investment? The tax credit law makes it possible to transform cinema into an investment”, notes Moreno Zani, Chairman of Tendercapital.

Returns connected to the cinema tax credit

But from the perspective of risk and returns, what is the status of cinema today? “It depends, for example films such as Perfetti sconosciuti had low budgets, but performed extremely well at the box office. Investors know what they are risking, but they can have a differentiated portfolio”, notes Favino, who started out as an actor to then move on to production, with the film Senza nessuna pietà, thus starting to put himself in the shoes of a businessman, who also needs to consider a film’s box office results: “As an artist, I do not like it, but as a businessman I think it is fair”.

How the cinema tax credit works

The cinema tax credit is a credit that can be used only to offset taxes. An external investor enters into a sort of joint venture agreement with the producer, and therefore invests in the production of a film by contributing capital and receives the return of the investment plus an extra return taxed at only 1.2% of 30-40% of the investment made. In brief, it is “an excellent way to incentivise a Made in Italy industry which generates profit as well as employment”, Dini concludes.