Russia cuts film tax credits as their country is facing a major economic crisis.
Russia has cut its public film subsidies for the year by $2.8 million, or 7 percent, according to reports.
Although 2016 has just started and it was previously labeled as the “Year of Cinema” in Russia, the Cinema Fund’s budget for supporting movies and the film industry has dropped several billion rubles.
From The Hollywood Reporter:
Most money, made in direct grants to production companies that are only returnable to state coffers if recipients make a profit on their movies, goes to a select group of leading production companies, including that of Oscar-winning director Nikita Mikhalkov.
Although few co-productions are shot in Russia, money is available to foreign producers who partner with Russians provided projects meet cultural and other criteria.
Currently, $23 million will go to major production companies, with the remaining $5 million being distributed throughout the industry.
It is important to point out that Russian government officials did not provide a reason for the reduction in the subsidies. However, recent economic pressures hurt the economy. Falling oil prices and a collapse in the value of the ruble against the dollar and other foreign currencies have forced the country to make major cut backs.
In fact, last year was the worst year for Russian film at the domestic box office in 10 years with movies made in Russia flopping in the box office more than 35%.
Box-office receipts more than halved from $258 million in 2013 for 59 releases to $116 million for around 125 releases in 2015. That partly reflected the damage wrought to producers’ bottom line by the ruble’s catastrophic drop in value. In 2014, a dollar was worth around 35 rubles. Today, a dollar is worth more than 75 rubles.
Without Russia’s film tax credits, producers and filmmakers will turn to other countries and cities like Atlanta, Georgia who currently provide 30% tax credits on qualified movies and TV shows.
