Brussels approves Czech film production incentives

Foreign film producers have good reason to return to Prague. Once a thriving filming location, the Czech Republic lost out to competition from Hungary, Romania and other countries of central and eastern Europe which offered lower prices and lucrative tax rebates. In an effort to lure them back, the Czech government came up with its own incentives package which has now been approved the European Commission.

Pavel Novák
Once aspiring to become the Hollywood of the East, the Czech Republic has in recent years lost its position among the most popular places for film productions in central and Eastern Europe.

While in 2003 foreign film crews spent over 5 billion crowns in the Czech Republic, the number has dropped to 700 million five years later.

One reason why Prague lags behind Budapest, Bucharest and other places in the region has been the lack of tax rebates for foreign film productions. But according to Czech Radio correspondent in Brussels, Pavel Novák, this will soon change.

“According to my sources close to the European Commission, I learnt that the system of incentives for the film industry, which the Czech Republic sent to Brussels for approval in January, has been approved so we can say the Czech Republic can start offering these incentives to film productions.”

Under the plan, film producers will be able to get 20 percent of their costs back – something Czech filmmakers have been calling for for years.

But the Czech government only approved the plan in October, and three months later it landed in Brussels. The Czech Republic has also been one of the last EU member states to introduce tax rebates for the film industry – so will the plan really put Prague back on the map?

Will Tizzard is the Czech and Slovak correspondent for the leading movie-industry publication Variety Magazine.

“Well, it’s great news obviously. This was the main barrier that has been holding the Czech Republic back from competing with Hungary and the other countries that are eager to have film productions. I think it’s not going to be a panacea; many foreign producers I’ve spoken to say this is great news but that people should not expect that productions here are going to jump back to the peak they had a few years ago based just on this.”

The Czech authorities have declined to comment on the grounds that they are still awaiting official notification of the approval. However, the Culture Ministry this year earmarked 400 million crowns, or more than 19 million US dollars, to spend on tax rebates for film producers shooting in the country. But Theo Schwinke, who covers Eastern Europe the magazine Screen International, says the situation will not change immediately.

“The problem right now is that it’s June and the year is nearly half way over, and international film productions that have been looking for an Eastern European location have already picked it. It’s possible that they have been waiting for the approval of the Czech incentives but it’s more likely that they have already decided to go elsewhere right now.”

Czech officials are hoping the incentive plan will work and bring back foreign filmmakers; George Lucas had earlier said he was considering shooting his Star War TV series here, and there has been interest from other American, German and French film producers.