In today’s world, films are not necessarily shot in the places that are scripted. Because of the high costs of creating content, filmmakers must research and chase tax incentives around the world. The downward pressure on budgets and the increased costs of shooting in the US have led to a significant shift in where projects are produced.
The Economic Reality of Production
It is often economically more viable to shoot outside of the United States than it is to shoot in the "movie capital of the world." Accountants and estimators use incentive research to inform where a project should be based.
Global Production Hubs
Many popular television programs and feature films are shot in jurisdictions that offer generous incentives and favorable exchange rates:
- Canada: The Last of Us and numerous other series.
- Croatia and Northern Ireland: Game of Thrones.
- Australia: Mortal Kombat, Furiosa, and Elvis.
- New Zealand: Avatar, Megan, and Evil Dead Rise.
- United Kingdom: Jurassic World, Barbie, and Wonka.
Navigating Tax Incentive Rules
When choosing a location, production teams must consider:
- Eligibility: Does the production meet the local requirements for the incentive?
- Incentive Caps: Are there limits on how much can be claimed?
- Above-The-Line vs. Below-The-Line: Does the incentive cover lead talent and producers, or only the local crew and resources?
The Impact on the Final Budget
Tax incentives can reduce a gross budget to a significantly lower net number, making a project financially viable for studios and financiers. For example, the California tax incentive and the UK’s generous programs are frequently used to help projects hit their greenlight numbers.
As production costs continue to rise, the ability to navigate the global landscape of tax incentives remains a critical skill for line producers and production executives.