# Italy Tax Credit for Foreign Film and TV Productions

Source: https://storiara.com/incentives/italy
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> Italy's incentive for foreign productions is a tax credit held by the Italian executive production or post-production company. It equals 40% of eligible production costs in Italy, or 30% on above-the-line costs of people not tax resident in the EEA. Eligible costs must be at least €250,000, the credit is capped at €20 million per company per year, and the project must score 50 of 100 points on a cultural eligibility test.

In Italy the credit belongs to the Italian company that makes the work on commission. That company files with the Ministry of Culture's cinema directorate, the DGCA, and uses the credit to offset Italian taxes and contributions it would otherwise pay. The foreign producer gets the value through the service agreement, so the contract has to spell out how the credit is priced and when it's passed on.

## The rules from the 2024 decree

The current foreign-production rules come from the interministerial decree of 4 October 2024. The main figures:

| Rule | Figure |
|---|---|
| Credit rate | 40% of eligible production cost |
| Non-EEA above-the-line personnel | 30% |
| Minimum eligible cost | €250,000 |
| Cap | €20 million per year per company or group |
| Above-the-line in the base | Up to 30% of total production cost |
| Financing, insurance, guarantee costs | Up to 7.5% of total production cost |
| Producer fee and overheads | Not eligible |
| Total public support | No more than 50% of the work's cost |
| Cultural test | 50 of 100 points |

Crew wages under national collective agreements count only up to the contract rate plus 20%. A department head paid well above scale won't bring the whole fee into the base. The decree also excludes costs for AI used in place of creative or artistic performances, with an exception for VFX work related to lead actors.

## Two examples with the numbers worked

A €1,000,000 shoot in Puglia with all eligible costs in Italy and EEA-resident talent:

- Minimum check: €1,000,000 is over €250,000
- Credit: €1,000,000 x 0.40 = €400,000

The same shoot with a US director and lead whose combined fees of €150,000 are in the base:

- Non-EEA above-the-line: €150,000 x 0.30 = €45,000
- Everything else: €850,000 x 0.40 = €340,000
- Credit: €385,000

A €5,000,000 Italian spend with €800,000 of non-EEA above-the-line:

- Above-the-line limit: 30% of total production cost. If the total production cost is €12,000,000, the limit is €3,600,000, so the full €800,000 counts
- €800,000 x 0.30 = €240,000
- €4,200,000 x 0.40 = €1,680,000
- Credit: €1,920,000

The €20 million annual cap applies to the Italian company, not to your project. If your service company already has big shows in the same year, ask how much room it has left before you sign.

## Timeline for the Italian company

1. Pick an Italian executive production company that qualifies: taxed in Italy, EEA registered office, film production activity code, and at least €40,000 of share capital and net assets.
2. File the preliminary request 90 days before production starts. The DGCA has 60 days to respond, and work must begin within 120 days.
3. Once the preliminary request is approved, 70% of the credit can be used. The company can ask for that share to be lowered to 40%.
4. File the final request within 180 days of completion, with certified costs. The DGCA approves within 60 days, and the remaining credit becomes usable.

The company can skip the preliminary request and file only the final one, but then nothing is usable until the end.

## Points to check before committing

The Italian company generally can't hold rights in the work. The DGCA can grant an exception only where an international co-production structure is shown to be impossible. If the deal involves the Italian partner taking a territory, talk to Italian counsel first.

The 50-point cultural test draws on Italian or European source material, setting, exterior shooting in Italy (at least 15% of exterior scenes), and Italian or EEA heads of department such as the costume designer and makeup lead. Score the script early. Our [cultural test guide](https://storiara.com/blog/the-cultural-test-how-to-qualify-for-international-film-incentives) and the [cultural test](https://storiara.com/glossary/cultural-test) glossary entry cover the general approach.

The credit isn't counted as taxable income for Italian corporate or regional production tax, which helps the service company's math.

Works of Italian nationality use a separate national production credit, which runs from 25% to 40% and is capped at €9 million per work, or €18 million when at least 30% of total costs are financed from outside Italy. An official [co-production treaty](https://storiara.com/glossary/co-production-treaty) with an Italian partner is the usual way a foreign project gets onto that track instead of the service credit.

## Italy compared with Malta, France, and Croatia

[France](https://storiara.com/incentives/france) pays 30% under TRIP, 40% with over €2 million of French VFX, and caps each project at €30 million instead of each vendor per year. [Malta](https://storiara.com/incentives/malta) and [Croatia](https://storiara.com/incentives/croatia) are frequent alternatives for Mediterranean locations. [Spain](https://storiara.com/incentives/spain) pays 30% on the first €1 million and 25% after that. The [incentives hub](https://storiara.com/incentives) compares all of them, and [why productions shoot overseas](https://storiara.com/blog/tax-incentives-and-global-film-production-why-shoot-overseas) covers the reasons they move.

## Frequently asked questions

### What is the Italian tax credit rate for foreign productions?

40% of eligible production costs incurred in Italy. Above-the-line costs of people who aren't tax resident in the European Economic Area earn 30%.

### Who claims the Italian tax credit?

The Italian executive production or post-production company hired by the foreign producer. It must be taxed in Italy, have its registered office in the EEA, and have at least €40,000 of share capital and net assets (€10,000 for shorts). Generally it can't own rights in the work.

### Is the Italian tax credit capped?

The cap is €20 million per year per Italian company or group of companies. The credit plus any other public support also can't exceed 50% of the cost of the work.

### How does the Italian cultural test work?

Foreign works must score at least 50 of 100 points on the decree's cultural eligibility table. Points come from things like Italian or European source material, stories set in Italy or Europe, exterior shooting in Italy, and Italian or EEA heads of department.

## Sources

- [Ministry of Culture DGCA: Tax credit, production of foreign works](https://cinema.cultura.gov.it/cosa-facciamo/sostegni-economici/linee-di-sostegno/tax-credit/produzione-opere-straniere/)
- [D.I. MiC-MEF 4 October 2024, rep. 329: tax credit for foreign productions (decree text)](https://cinema.cultura.gov.it/wp-content/uploads/2024/11/DM-TC-internazionale.pdf)
- [Ministry of Culture DGCA: Tax credit, national production](https://cinema.cultura.gov.it/cosa-facciamo/sostegni-economici/linee-di-sostegno/tax-credit/produzione-nazionale/)