Italy's New Tax Credit Cinema Decree Raises Rates to 40%

On February 5, 2021, Italy implemented Interministerial Decree No. 70, which updates the cinema tax credit framework established by the 2021 Budget Law (Law No. 178 of December 30, 2020). This law increased credit rates to 40% and allocated €640 million annually to the Film Investment Fund. It supersedes the decree from March 15, 2018, applicable only to applications submitted by December 31, 2020. Notable rates include 40% for independent Italian films and 25% for those from non-independent producers. New caps are set at €9 million per project or €18 million if 30% of expenses are incurred abroad. Expenses related to Covid-19 safety qualify for a 100% credit, capped at €400,000. The application process has been streamlined, and the transfer of credits is still permitted.