On 27 September 2017 the Cabinet of Ministers has approved a new scheme (the 'Filming Scheme') with the purpose of attracting individuals, local and overseas companies specialising in the filming production to develop and relocate their business and activities to Cyprus by offering them various attractive tax incentives as detailed further below.
The Filming Scheme was developed by the Unit of administrative Reform of the Presidency in cooperation with the Cyprus Investment Promotion Agency (CIPA) and the Ministry of Finance in accordance with Regulation 651/2014 of the European Commission.
Who is eligible to apply for the Filming Scheme?
1) individuals in the private sector;
2) legal entities shall carry the special purpose recognition initials AVC (AudioVisual Cyprus) following their name;
3) legal entities which shall be registered in the Republic of Cyprus, or any other European Union Member State, provided that they carry on business in the Republic of Cyprus through a branch or office in the Republic followed the approval of their application; and
4) shall be strictly restricted to one and only audio-visual production. The integration of more than one production under the same Applicant (slate of films) is expressly prohibited, unless certain requirements are satisfied.
It is noted that there is no restriction on the percentage of foreign ownership participation.
What are the Tax Incentives?
The Filming Scheme provides the potential investors with various incentives including:
- a return of VAT on film expenditure.
- can allow a tax allowance of 20 per cent for investment purposes in filming infrastructure and relevant equipment which may be varied in accordance with the enterprise size.
- enables the potential investor to choose to apply either for cash rebate where the annual available sum cannot exceed the amount of Euro 1,500,000 or the tax credit which shall be considered as an aid for the reduction of the applicable corporate tax, considering that the potential investor must choose which incentive shall take advantage off, given that the investor cannot apply for both. However, the potential investor may choose to apply to obtain the available tax allowance for the investment in the eligible film production infrastructure and equipment such as filming studios, audio-visual processing premises, filming equipment etc, together with the incentive of the applicable VAT return. The potential investor may apply for the tax allowance for the investment in infrastructure and equipment as well as to obtain the VAT return.
How we can help?
- Advice on how to best structure your investment
- Advice on the possibility to obtain any single and/ or combination of the relevant tax incentives
- Assistance with the application
- Liaising with the authorities
- Financing advice
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.