The introduction of tax incentives similar to the UK's sale and leaseback model or the Canadian tax credits system could result in a doubling of production expenditure in Germany over the next five to seven years, according to the producer pressure group film20.
In a study commissioned from the economist and management consultant Dr. Michael Paul, it was suggested that adoption of either of these two incentives could make Germany internationally competitive again by offering "the last 10% to 15% which often represent the biggest problem in the financing of film projects."
According to Paul's estimates, the introduction of the UK or Canadian models could potentially create another 23,000 jobs in the film industry and double the current volume of Euros 380m production expenditure in Germany to Euros 600m by 2010.
"Film production in Germany is at a turning point", the study concluded. "Either we succeed in becoming competitive again on international productions and thereby make a lasting improvement on the economic prospects of production in Germany, and then the film industry will be able to generate substantial positive effects for the whole economy. Or Germany will lose even more ground in the international competition for 'runaway productions'."
Commenting on the film20 proposal, tax lawyer Christof Schmidt of PWC Veltins and a member of the advisory board of the Verband Deutscher Medienfonds, said "it is a good idea to think in this direction, but the proposal is extremely complicated. It is quite difficult to introduce such a complex model for tax incentives as a completely new regulation. I can't see one being able to realise this within the next few months."