The Hungarian tax incentive scheme

The Hungarian financial support system (Motion Picture Act and Corprate Tax Act) has two pillars: indirect state support (tax incentives for films and related projects) and direct state support (for local films or co-productions).

Only feature films, short films, documentaries, science, nature and animated films, made-for-TV movies and TV series are eligible.

 

Tax rebate is 30% (from July of 2018) of the eligible Hungarian spend

Eligible spend includes all payments contained in the budget that were paid to a Hungarian taxpayer

  • Direct pre/post and production expenses paid by the qualified Hungarian production
  • Wages, above- and below-the-line, when paid by the qualified Hungarian production
  • Financing costs, and administration, insurance, completion bond, accommodation, etc. costs

Items excluded by the law are

  • Indirect costs (eg. A&P) over 2% of the overall spend (max 17 kEUR)
  • Costs incurred after the master print (distribution)
  • Royalties are limited to 4% of the Hungarian budget of the film
  • Producers’ fees are limited to 4% of the Hungarian budget of the film

 

Up to 25% of the eligible spend can be foreign spend which also qualifies for the 30% (from July of 2018)  tax rebate.

Total state subsidies shall not exceed 50% of the production budget, or in case of

  • Co-productions 60% (from 2014.0625.) of the Hungarian contribution in case another European Economic Area member state’s registered film production company participates in the co-production
  • Co-productions 100% (from 2014.06.25) of the Hungarian contribution in case another OECD member state’s registered film production company participates in the co-production
  • Low-budget films and films produced in Hungarian language the extent of subsidies is 100% (from 2014.06.25)
  • Documentaries, animation, shorts, experimental films etc. 100%

The tax rebate is a non-recourse, non-repayable and non-recoupable cash rebate.