Film glossary

Tax Credit

A film tax credit is an incentive that reduces the tax a production owes in a jurisdiction, based on qualifying local spend.

A refundable credit pays out the balance in cash if the credit is larger than the tax owed, which matters for productions with no local tax liability. A transferable credit can be sold to another taxpayer, usually at a discount, to turn it into cash.

Because a credit can arrive after production, many producers borrow against an approved credit to access its value earlier. Rates, caps, and rules vary by jurisdiction and change often, so always verify current rates and confirm eligibility with the film office before you budget around a credit.

Go deeper

Film Tax Incentives guideFilm tax incentives are government programs that return part of what a production spends in a region, as a tax credit, a cash rebate, or a grant. They lower a film net cost by rewarding local hiring and spending. Rates, caps, and rules vary by jurisdiction and change often, so always verify current rates before you budget.

Related terms

Keep reading the glossary

Soft MoneySoft money is the umbrella term for grants, subsidies, and incentives that do not carry commercial repayment terms.Hard MoneyHard money is film capital that must be repaid on commercial terms, such as equity and interest-bearing debt.Sales AgentA sales agent represents a film to buyers across territories, using a mandate from the producer to license rights on the film behalf.Recoupment WaterfallThe recoupment waterfall is the agreed order in which each source of capital is paid back from the revenue a film generates.

Questions

Frequently asked

What is the difference between a refundable and a transferable tax credit?

A refundable credit pays out in cash if it exceeds the tax owed. A transferable credit can be sold to another taxpayer, usually at a discount, to convert it into cash.

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This definition is educational and does not provide financial, legal, or tax advice. Consult your own licensed advisors before acting. FILM.FUND is a software and workflow platform, not a broker-dealer. It never handles money, never holds securities, never takes a percentage of any raise or sale, and never predicts returns.