Austria, Film Financing and Television Programming: A Taxation Guide

Austria, Film Financing and Television Programming

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Through a variety of recognition over the past several years, the Austrian film industry established itself as a warrantor for sophisticated successful movies and consequently received the focus of the international filming business. Most notable were: the enormous international success of the Austrian film production Die Fälscher, which won the 2008 Oscar for Best Foreign Film; the movie Revanche, which was nominated for the 2009 Oscar for Best Foreign Language Film; and director Michael Haneke, who was awarded at the Cannes Film Festival; Cannes 2009 and nominated for an Oscar in 2013 for Amour. Additionally, Austrian actor Christoph Waltz was awarded an Oscar in 2009 and 2013 for his acting in Quentin Tarantino’s films Inglourious Basterds (also awarded at Cannes 2009) and Django Unchained

Nevertheless, despite these highlights, the Austrian filming industry cannot be compared with the international film production industry at all. There are some public funds available to foster the Austrian film business, but there are no special tax rules to further support the development of the film business and no tax incentives to attract private money. According to the budget available for the Österreichisches Filminstitut, organized by the Austrian government, it is the biggest governmental promoter followed by funds controlled by several Austrian provinces; Vienna, as the capital of Austria, has the biggest budget for promoting the filming industry in Austria. 

Compared to Germany, Austrian legislation does not provide specific rules to promote the filming business in Austria; Germany, for example, introduced a “media decree” providing guidance on tax issues in regard to the production, distribution, and financing of films. Besides, like in Germany, Austrian tax authorities limited possibilities to create a tax-efficient model of film funds for private individuals by applying § 2/2a of the Austrian Income Tax Law. According to that rule, losses arising out of tax deferral schemes may neither be used to offset income nor deducted pursuant to the general loss carry forward rules. Instead, such losses can only be used to offset income of the taxpayer arising from the same source as such losses. According to this legislation, a “tax deferral scheme” is given if a scheme or structure gives rise to tax benefits in the form of book losses. This rule that is pointed out in Nr. 160 of the Austrian Income Tax Guidelines has more or less prevented private investors from investing in film funds. 

The financing, as well as the taxation of a movie and filming production in Austria, is based on the general tax legislation. Hence, the following should give an overview about the possibilities available for financing and structuring filming productions in Austria. 

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