The scheme for the promotion of the film industry has entered in to force on 11 September 2018, as per an announcement by Invest Cyprus, the body responsible for investment promotion in Cyprus.
An online platform, named Film in Cyprus(https://film.investcyprus.org.cy/), has been created through which interested parties can get information and submit an application to participate.
The scheme aims to put Cyprus on the map of attractive destinations for shooting films and other audio-visual productions.
It is expected that together with some other advantages offered by Cyprus, such as good geographical location and convenient time zone, excellent and steady weather conditions including many days of sunshine, short travel distance between different locations within the country and the variety of landscapes, this scheme will help in placing Cyprus in the list of attractive locations for international film productions.
The scheme covers productions such as films, TV series, documentaries, animations, research and natural history TV programmes.
It provides the following incentives:
· a cash rebate of up to 35% of selected expenditure incurred in Cyprus with a maximum of EUR650,000 per production in a 12-month period, with a total for all productions equal to EUR1,500,000 per annum. The percentage of the rebate will be determined based on certain criteria of a cultural nature (including participation of local actors, of cultural elements, etc.). The rebate will be granted upon completion of shooting and after a financial audit is completed;
· as an alternative to the above, a tax credit available to the production company, without the EUR650,000 cap. The same criteria as with a cash rebate apply for this option as well. Furthermore, the application needs to be submitted by a legal person, which is liable to tax in Cyprus and the credit can not exceed 50% of the taxable income in the year in which the production takes place. Any unitilised amount of the credit can be carried forward for five years;
· a tax deduction on capital expenditure (filming infrastructure and technological equipment) not exceeding 20% of deductible expenses for small businesses and 10% for medium size businesses. In case of equipment, this must remain in Cyprus for a period of at least 5 years; and
· a VAT refund available to the production company for selected expenses made for the production by physical persons or legal entities from third countries.
Furthermore, Invest Cyprus, which contributed for the development of the scheme, will be assisting producers with issues such as entry permits, working licenses, film licensing, importation of equipment and other material as well as with the provision of guidance and information, in cooperation with the relevant authorities.
An evaluation committee will be formed for examining proposals to be made by producers. Once the evaluation is performed the committee will be making recommendations for qualifying proposals to the Minister of Finance, who is considered as the Responsible Authority for the operation of the scheme.
Invest Cyprus has already commenced the promotion of the scheme and to this respect the Cyprus Film Summit 2018 will take place on 10 October 2018. Film and audiovisual professionals from all over the world are invited to participate in an event aiming to touch on the latest developments in the global industry and in Cyprus and to present all the island has to offer as a natural filming studio.
Other important incentives already available in Cyprus, which could be combined with this scheme, include the following:
· citizenship and permanent residency by investment;
· exemptions from emoluments earned in Cyprus for persons who become tax residents to work in the country;
· “non-dom” regime (exemption from all taxes on dividends, interests and rents irrespective of where they are earned and of whether they are received in Cyprus or not);
· notional interest deduction on fresh equity (applicable to both new and existing companies as from 1 January 2015);
· IP Regime with 80% exemption of profits on qualifying intangible assets.