Producers of film and TV programmes can now apply for reimbursements from the State Treasury of 20% of their production spend in Iceland. Applications are sent to the Ministry of Industry before the start of production. When more than 80% of the total production costs of a film or TV programme are incurred in Iceland, the reimbursement is calculated on the basis of the total production cost incurred within the European Economic Area.
For Einar Hansen Tómasson from Film in Iceland Agency, this new measure makes Iceland one of the most attractive locations in Europe. "Not only is the landscape stunning and unique. We also have very skilled production service companies and the weakening of our currency is a great incentive."
Producer Skúli Malmquist (Zik Zak Filmworks) added: "As I understand it, the bill got a 100% vote in Parliament which is very encouraging for the film community and shows that our work is recognized and respected by all political parties. This initiative will help Iceland in times of trouble as well as Icelandic productions. However, one has to bear in mind that production grants from the Icelandic Film Centre, and the 20% tax incentive combined cannot exceed 50% of the overall budget because of European law. So for smaller films this will often not have an impact, but for bigger productions it is very important."
Past major US productions shot in Iceland include Journey to the Center of the Earth 3D, Clint Eastwood's Flags of our Fathers, and Matthew Vaughn's Stardust. Iceland's top filmmaker/producer Baltasar Kormákur who was actively involved in the discussions with the government on the tax credit increase, using his $50-70m Vikingr project as an incentive, will probably be one of the first ones to apply for the new rate.