The Italian government will announce major changes to its film and TV tax credit system this week, aimed at boosting local productions and producers and ensuring more Italian stories are told on screen. The changes come after a year of uncertainty that has left many productions in limbo.
Under the new rules, international co-productions will face a cap of €18 million ($19.7 million) on tax credit payments for projects where at least 30 percent of the production is made in Italy. Local productions will be capped at €9 million ($10 million). The overall fund for film and audiovisual investments in 2024 remains unchanged at around €700 million ($782 million).
The change is designed to boost Italian TV and film and encourage visiting international productions to focus more on Italian stories, such as Michael Mann’s. Ferrarion the life of the legendary car designer, starring Adam Driver and Penelope Cruz, which premiered at last year's Venice Film Festival, or Ridley Scott's film Gucci Houseon the legends of Italian fashion, starring Driver and Lady Gaga.
A separate tax credit for international production, which benefits visiting productions filming in Italy, and has helped companies like HBO The White Lotuschooses Sicily as the location for season 2, is still working its way through the Italian parliament. The centerpiece of that reform is a 30 percent tax credit, rising to 40 percent for Italian talent.
The past 12 months have been a stalemate for the Italian industry. Many Italian productions have stopped filming while waiting to see what level of tax credit they might attract after the culture ministry, under Prime Minister Giorgia Meloni, called for a comprehensive reform of the system.
Industry unions criticized the government's proposals after the publication of the text of the new reforms.
“It is difficult to find the strengths of this reform,” notes Andrea Paris, producer of Groenlandia/Ascent, who worked, among other things, on Sydney Sibilia's film I stop when I want trilogy. He notes that uncertainty over reforms has brought production to a standstill, leaving thousands of workers in the sector without a job since the beginning of the year. “Small and medium-sized businesses are slowly suffocating to death,” he says.
Nicola Giuliano, producer and co-founder of Indigo Film, which produced Paolo Sorrentino's Oscar-winning film The great beautyHe acknowledges that the current system has been exploited by some of his colleagues, “who have exploited the situation to enrich themselves. I cannot oppose this intention to reduce funding. Those who use the tax credit improperly, for their own personal gain, put the entire sector and those who work in it at risk.”
But Giuliano sees problems with Rome's reforms. “Producers are asked to declare [before production] exactly how many screens their film will be released on. That's not something a producer can know.”
The Italian film and television industry has been booming lately, with local blockbusters like Matteo Garrone's Oscar-nominated film I Captain and surprising success at the box office There is still a tomorrow by Paola Cortellesi. International companies are investing in Italian feature films, such as Fremantle, through their Italian production subsidiaries Lux Vide, The Apartment and Wildside that support productions such as Pablo Larraín's Marywith Angelina Jolie, and Queer by Luca Guadagnino with Daniel Craig.
Streamers have also invested more in Italian content, see Good mothers from Disney+ or Netflix Super sex. Italy is also co-producing with more countries: Anica and APA research recently cited a 51 percent increase in the number of films and TV series made with international producers. Locally, however, the Italian box office has yet to recover to pre-pandemic levels. Audience figures are still 23 percent lower than in 2017-19. The box office success of There is still a tomorrow still remains largely an exception.
It was during the COVID pandemic that the Italian government increased its production tax credit from 30 to 40 percent in a (successful) effort to bring in international productions. But the very success of the tax credit has led to concerns about its misuse, with many productions supported by the tax credit struggling to reach an audience.
Roberto Stabile, head of special projects at the Ministry of Culture's Directorate General for Cinema and Audiovisual at the Cinecittà studio in Rome, points out that the tax credit was increased during the pandemic to support the industry, and it has been a success. “Two years into the long pandemic, the health of our audiovisual industry is very good,” he says. “But this type of support risks becoming like a drug for the market.”
Carlo Cresto-Dina, producer and CEO of Tempesta, which produces Alice Rohrwacher’s feature films, adds that it is important to recognize how successful the tax credit has been in strengthening the Italian industry, while acknowledging that reform is needed.
“I believe we should find a way to ensure qualified access to the tax credit to ensure that public money is spent on films that are then seen and appreciated,” Cresto-Dina says.