Ten Crucial Questions When Considering Production Incentives (Part 2)
These might just save you a small fortune
We’re on a mission to demystify the often confusing world of media production incentives, helping producers close that daunting funding gap.
Last week we covered the first five crucial questions to ask when considering production incentives.
Now, we hit the back half of our top ten, including some details that could really cost you – or help you save even more money.
Let’s dig in.
Are there any bonuses or extras I should consider?
It’s possible.
Various jurisdictions offer bonuses, or “uplifts,” if your project meets certain criteria.
New Mexico’s base credit of 25% can swell to 40% with uplifts that include:
an extra 10% for filming more than 60 miles from Santa Fe and Albuquerque
an extra 5% for TV series and pilots that meet specific conditions
an extra 5% for using qualified in-state production facilities (like soundstages)
Planning ahead and simply shifting a shoot location could substantially increase your incentive.
Mongolia’s base 30% rebate could return even more given their 10% bonus for culturally relevant content and 5% foreign talent reimbursement.
Some producers may rule out an incentive because their project doesn’t meet the required minimum local spend. But some programs, like Georgia’s, allow companies to bundle their spending across multiple productions to meet their threshold. For jurisdictions where the level of the incentive increases with your local spend, bundling could push you into a higher bracket and save you even more.
Jurisdictions often offer informal money-saving benefits to productions, too, like free assistance with location scouting or media rates on accommodations and vehicle rentals. It never hurts to ask.
What about foreign/out-of-state labor – can I collect an incentive on that cost?
This depends heavily on the jurisdiction.
In some, the incentive applies; in others, foreign/out-of-state labor qualifies at a reduced rate. It may depend on the role. Occasionally, a salary cap may apply.
In any case, be sure to check the specifics. It might make great financial sense to hit up that local labor pool!
Note that some jurisdictions require foreign/out-of-state labor to register and pay local payroll taxes. A payroll service like Entertainment Partners, Extreme Reach, Cast & Crew, or Wrapbook (among others) can help streamline the process.
Is there a limit to how much a single project can receive?
Almost always!
Keep an eye out for caps, which may include:
caps on the total amount a single project can receive
annual caps on the total amount of funds the jurisdiction has available for a given period
caps for specific spending categories (like talent and crew salaries)
As you compare incentives programs, pay careful attention to any caps that might limit the amount your project could receive.
What’s all this talk about a “cultural test”?
If you’ve looked into international incentives, you may have seen references to a “cultural test,” like this one for the UK, or Malaysia’s, in Appendix C of this document.
People often mistakenly believe that their project needs to be 100% editorially focused on a country or culture in order to pass the cultural test, but that isn’t entirely true.
The cultural test usually evaluates a project in three areas:
Favorable portrayal of the jurisdiction while featuring its locations and/or recognizable destinations.
Inclusion of cultural elements like food, wine, language, and local traditions.
Use of local on-camera talent and/or crew in designated roles.
Cutural tests often award points for each category, so your project may still pass even if it doesn’t nail all three categories.
If you’re planning to target a particular incentive, it’s important to review the cultural test and plan accordingly. I know of at least one unscripted project that missed out on an incentive worth hundreds of thousands of dollars because they hired a DP from the US instead of the EU. If you’re not doing your research, a single decision like this could cost you.
Who applies for the incentive…the production company, network, or…?
This varies.
Sometimes, a local entity must apply. That may mean applying through a local service provider. Alternatively, a production company may be able to easily set up a local entity of their own.
In other cases, a production company can apply even if they’re foreign/out of state. Occasionally, it might make sense for the broadcaster/streamer/studio to apply instead—especially if they have a tax liability in the jurisdiction that allows them to take full advantage of any tax credits, and/or if they’re able to bundle a number of productions from different production companies that individually don’t meet minimum spend requirements.
Have questions of your own about incentives? We’re here to help.
Drop me a line at carrie@globalcontentstrategies.com.
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