The 2016 has seen the establishment of a new and more robust mechanism for incentivizing filmmakers to use Serbia as the location of choice in the region. Besides the Government Regulation from 2015, new guidelines have been adopted and the annual public call for applications for year 2016 has been published (http://bit.ly/20pLU8x – only Serbian version available).
A. Amount of Incentives and Eligibility
Incentives can be awarded in the amount of up to 20% of eligible costs which an investor paid in the Republic of Serbia regarding a particular project.
The condition to be fulfilled by the investor in order to become eligible for incentives is that, in order to produce an audiovisual work, the project budget allocated for production of the work in the Republic of Serbia, be in the amount higher than the following minimums:
- for a feature film, TV movie and TV series – EUR 300,000.00;
- for an animated film, audio and/or visual post-production of audiovisual works – EUR 150,000.00;
- for a special purpose film (which includes commercials and TV ads) – EUR 100,000.00;
- a documentary film – EUR 50,000.00.
Further to the above, there are minimum duration of the audio visual work requirements:
- feature films, TV films, feature-length documentary and animated films intended for screening, which last at least 70 minutes;
- TV series of at least three episodes, each lasting at least 40 minutes;
- documentary TV program lasting at least 40 minutes.
B. Vehicle for Applying
An investor can apply through either a Serbian SPV or directly through a foreign company. Nevertheless, due to the intricacies of procedural rules and practices applied by Serbian public authorities (especially the Tax Administration), it is preferable to incorporate a Serbian SPV for the purposes of applying for incentives.
C. Receiving Incentives
The process for receiving incentives involves several steps:
Before starting the implementation of the project in Serbia, the prospective investor presents his plan for making an audiovisual work in Serbia to the Commission for Allocation of Incentives Resources („Commission“), which must explain in detail the activities and related costs of the project in Serbia.
II. Evaluation of the Application
The Commission evaluates the merits of the project, its compliance with the eligibility criteria and, if it deems it eligible and funds are available, it recommends the project to the Ministry of Economy („Ministry“). The Ministry then enters into an agreement with the investor which outlines the schedule of executing the approved project as well as other relevant arrangements („Agreement“).
III. Producing the Work in Serbia
Following the execution of the Agreement, the investor starts implementing the project, with an obligation to disclose weekly reports to the Commission, and justify any deviations from the schedule outlined in the Agreement.
IV. Payment of the Incentives
After the project has been executed, and the Commission and the Ministry certify that the project has been implemented in accordance with the Agreement, the investor shall receive the funds within 60 days of the Ministry’s certification on a special account with the National Treasury.
By Milan Samardzic, Partner, and Nikola Kasagic, Senior Associate, SOG / Samardzic, Oreski & Grbovic
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