In the last days of 2011, the Serbian Parliament passed the new Cinema Law which includes tax incentives for foreign productions shooting in the territory.
Serbia’s first law on film since 1991 has been through numerous rewrites, and according to the adopted version, state funding of local productions will be sourced from 1.5% of finances coming from the mandatory subscription to the national broadcaster RTS, 20% of the income of the public broadcasting regulatory body, the Republic Broadcasting Agency, and 10% of the Republic Agency for Electronic Communicatons’ income from telecommunications providers.
A crucial part of the Cinema Law are the tax incentives for international productions, devised and promoted by the state-independent Serbia Film Commission. They are based on a straight-forward 15% cash rebate on goods, products and services purchased for international productions in Serbia. There is a further 12% rebate on Serbian labour, which also includes foreign crew and talent if they are paid in Serbia during the course of production.
The international producers have to apply via a Serbian production company or a “Special Purpose Vehicle” – a company registered in Serbia solely for a particular production.The applications will be adjudicated on a first-come, first-served basis. No cultural testing is required, nor a minimal percentage of the production to take place in the country.
The law is expected to go into effect in June, and in the meantime, neighbouring Croatia’s tax incentives are already functional, from January 2012. They consist of a 20% cash rebate on the cost of Croatian cast and crew, as well as goods and services purchased in the territory. Croatia also differs by a cultural test which comprises three categories: cultural content, creative talents and production.