Financing / Crowdfunding : Film Tax Credits & Film Tax Incentives Overview - Know the Different Types for Production Finance by Jack Binder

Film tax credits and film tax incentives (aka production incentives) tend to be one of the most misunderstood concepts in filmmaking. While commonly understood as free money for productions, monetizing, accessing, and the benefits remain controversial.

When relying on production incentives for film financing, filmmakers must be aware of the different types of film tax credits. Mainly, these are refundable, rebate, and transferable by definition.

A rebate, or refundable tax credit is paid to production based upon an allowable expenditure audit and confirmation. These amounts are paid when they exceed the tax liability of the production in the jurisdiction (which is generally low.)

A transferable film tax incentive is one that must be brokered to a buyer of tax credits, which they use to offset a company's local tax liability. This process reduces the amount a production receives from the credit, and must be figured into the finance plan to allow for the reduction in value.

For a more detailed analysis and links to film tax credits sites explaining multiple area offerings, check out our recent post:

https://filmbudget.com/film-tax-credits-and-film-tax-incentives-explained/

Good luck in film financing and production!

Jack Binder

Producer

FilmBudget.com Worldwide