20% CASH REBATE – STIMULATING INVESTMENTS FOR FILM OR TELEVISION PROJECTS
In accordance with the new Film Industry Law (Official Gazette of Republic of Macedonia No. 82/2013, 18/2014 and 44/2014), the Macedonian Film Agency starting this year will stimulate the investments in film or television projects using the right to refund of the invested funds.
RIGHT TO REFUND OF THE INVESTED FUNDS
A film producer who in Republic of Macedonia has invested funds for filming a feature, documentary, animation or television film or television series (hereinafter referred to as: film/television project), may acquire the right to receive a refund of the amount equal to 20% of the gross expenditures made in Republic of Macedonia for the filming of the film/television project.
|Feature films||Advertising audiovisual products|
|Documentary films||Audiovisual commercial communication|
|Animation films||Soap operas|
|TV films||Situational comedies|
|TV series||Television shows and other TV programs|
Minimum local spend per project: In order to have a right to refund, the minimum amount of invested funds for eligible expenditures for the film or television project, should not be lower than EUR 100, 000 in MKD equivalent according to the middle exchange rate of the National Bank of Republic of Macedonia. The funds spent for the film/television project should not be provided from the budget of Republic of Macedonia but from other national or foreign sources.
Who can apply: Authorized representative for submission of the request for refund is a film producer from Republic of Macedonia with film production as its registered dominant activity, that has made and publicly exhibited at least one feature film as a producer or co-producer and is authorized by contract to act as a producer, co-producer or provide production services in relation to the refund procedure.
Body in charge of the procedure for acquiring the right to receive a refund: Macedonian Film Agency – Commission for Establishing the Right to Refund.
Deadline for submitting the request: At least 15 days prior to the start of the filming of the film/television project.
- filled in application form / Request;
- current status of the entity issued by the Central Registry of Republic of Macedonia, not older than six months;
- notarized statement confirming that the funds spent for the film/ television project are not provided from the budget of Republic of Macedonia;
- certificate issued by a competent authority (tax administration) confirming that all taxes and other public levies in Republic of Macedonia have been paid, not older than one month;
- certificate issued by a competent authority confirming that the producer is not a subject of bankruptcy or liquidation procedure in Republic of Macedonia, not older than one month;
- certified production contract, co-production contract or contract for production services for the making of the film/television project, where the authorized representative is responsible for the procedure related to the refund (In case of a completely foreign production, the contract must be submitted in the original language and translated into Macedonian, certified by a sworn translator;
- screenplay and short synopsis of the film/television project for which the refund is requested;
- budget for the film/television project for which the refund is requested with an overview of planned eligible expenditures in Republic of Macedonia;
- operational plan for the filming of the film/television project with final dates for the start and ending of the filming of the film/television project;
- evidence that the film producer has made and publicly exhibited at least one feature film as a producer or co-producer and
Procedure for approval: The Director of the Macedonian Film Agency upon a proposal of the Commission for Establishing the Right to Refund, within the period of 15 days since the request has been submitted, issues a certificate to the applicant confirming that he meets the requirements for refund.
The certificate guarantees that the applicant – film producer meets the requirements for obtaining a right to refund. By issuing the certificate, the authorized representative is obliged in the shortest amount of time to open a separate account for operational purposes i.e. for proper use of the funds in some of the commercial banks operating in Republic of Macedonia under the title of the project and to make a transfer in the minimum amount issued in the certificate, which should not be lower than EUR 100, 000. Prior to the start of the filming of the film/television project, the producer is obliged to submit bank reports and evidence of the transfer of the minimum amount of funds after which the film producer concludes a contract with the Agency for the right to refund. The contract determines the rights and obligations of both parties, the amount of the eligible expenditures and the requirements which the producer has to meet in order to obtain the right to refund. The certificate with which the Agency confirms that the producer meets the requirements for refund is an integral part of the contract.
The Film Agency of Republic of Macedonia shall issue certificates only within the amount of the funds provided from the Budget of the Agency intended for refund in the current year.
Certificates shall be issued on the basis of first-come-first-served until the annual budget for this purpose is depleted.
Increasing the budget for the film/television project: If a film producer that has been issued a certificate decides to invest additional funds intended for the filming of film/television project, for eligible expenditures made in Republic of Macedonia in the minimum amount not lower than EUR 100,000, has a right to submit another request for obtaining the right to refund to the additional amount of funds within a period of 15 days prior to the transfer of the funds to the separate account.
Eligible expenditures: The Commission for Establishing the Right to Refund accepts as expenditures all expenditures which in accordance with the Law are considered eligible, and which have been incurred starting from the day of the issuance of the certificate, using the funds from the separate account intended for this purpose.
Deadline for submitting the documents for receiving an incentive payment: The film producer which has been issued a certificate, within a period of 45 days after the finalization of the film/television project in the Republic of Macedonia, must submit the following documents to the Agency:
- calculation of eligible expenditures incurred in Republic of Macedonia for the filming of the film/television project;
- documents for expenditures (invoices/receipts, specifications, contracts) incurred for the filming of the film/television project;
- evidence for payments made for eligible expenditures (bank statements from the separate account);
- audit report on the financial implementation of the film/television project, prepared by an independent auditor hired by the Agency, at the cost of the film producer.
If the Commission establishes from the enclosed evidence that the payments made for eligible expenditures are higher than the realistic prices for the specific type of services or goods in Republic of Macedonia, the Commission may request an explanation for the higher prices and if after this additional explanation it is established that the amount is not realistic, the Commission may request the Agency to hire an authorized assessor who will determine the realistic price for the incurred expenditures.
Decision for payment for the purpose of refund of funds: The Director of the Agency upon a proposal of the Commission within a period of 30 days since the day on which the evidence for incurred expenditures have been submitted, adopts a decision to pay the funds to the film producer, for the purpose of refund of funds. The payment of funds will be carried out through the separate operational account.
Decision for rejecting the request: If the Commission determines that the expenditures from the calculation have not been incurred for eligible expenditures (Appendix 1), the evidence for payments made for eligible expenditures are higher than the realistic prices for the specific type of services or goods, or that the audit report determines irregularities in the operation of the film producer, the Commission may propose the Director of the Agency to adopt a decision for rejecting the request for refund and the film producer loses the right for refund of funds resulting in the termination of the contract.