Tax Incentive
From ForcaWiki, the simple encyclopedia
| In one sentence | Any government rule that reduces the taxes a person or company owes, or pays them back directly, based on how much they spent in that government's area. |
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| Category | Film and Television |
| Related | Tax Credit, Cash-Flowing |
Think about a store offering you a coupon for shopping there often, or even mailing you cash back after you spend a certain amount. Both are rewards for spending money in a specific place, just handed out in slightly different forms.
A tax incentive is the broader government version of that idea. It is a rule issued by a government that reduces the taxes a person or company has to pay, or that pays them back directly, based on how much they spent within that government's state or country. A Tax Credit, which reduces income taxes specifically, is one common example of a tax incentive, but a tax incentive can also come as a straight cash rebate, handed back to a production instead of only lowering its taxes.
Fun facts
- Governments offer film tax incentives because a movie production usually hires a lot of local crew and rents a lot of local equipment, hotels, and locations, putting money into the local economy.
- Because tax incentives come in so many different forms around the world, producers often study them closely, alongside things like comps, when deciding exactly where to shoot a movie.
- Some tax incentive programs pay out slowly enough that productions need to cash-flow their spending and wait to be reimbursed later.