Amidst the coronavirus pandemic, the global film industry is potentially facing billions of dollars in losses as theatres are closed and film releases are pushed back. Productions are also badly affected due to restrictions, which have left many workers unemployed or forced to work from home. Each time a production shuts down, it puts hundreds of crew members and cast out of work, including drivers, lighting technicians, directors, production assistants, camera operators, and more.

In this review, we look at rescue measures introduced for the film industry in Central and Eastern Europe in response to COVID-19 crisis. We have checked relevant regulations in Poland, Hungary, Slovakia, Czech Republic, and Romania. So far, support measures for the film industry in CEE are available only in Poland and Hungary.

In the course of the coming weeks, we will keep updating this document with evolving guidance in CEE and other countries in and outside the EU.

In addition, broadcasters and VOD platforms in Europe and the US have announced plans to set up funds to support independent production. For example, BBC revealed a five-point plan designed to support the UK’s independent production sector, including doubling the investment in its ‘small indie’ fund. UK’s ITV revealed a £500k ($615k) development fund designed to accelerate the search for new ideas and content for the channel to play in the later part of 2020 and in 2021. Netflix set up a $US100 million fund to help with hardship in the creative community in March and boosted it to $US150 million in April.

Germany

The federal and state film funding agencies have developed a joint aid program with measures for production, distribution and cinema, which is meant to be implemented quickly and with little bureaucracy. The aid program, worth €15 million, is jointly supported by eight state funding agencies as well as the German Federal Film Board and the Federal Government Commissioner for Culture and Media. It will apply to projects jointly funded by different funding institutions, which have not benefitted from any other federal and state aid measures and funding programs set up in the context of the pandemic.

Measures to support the production sector include:

  • Aid for projects with a planned start of production by 30 June 2020, for which a written funding commitment or notice of approval had already been submitted by 18 March 2020;
  • Waiver of the reimbursement of funds already disbursed and used for the intended purpose in the event of a pandemic-related interruption of shooting; and
  • Special aid for additional costs in case of pandemic-related interruption and postponement of shootings.

However, details, for example, with regard to application requirements are still unclear.

Furthermore, the Executive Board and Administrative Board of the German Federal Film Board (FFA) have decided on a (separate) comprehensive package of measures to support the German film and cinema industry. The package must still be approved by the FFA legal supervisory authority, the Federal Government Commissioner for Culture and the Media. In case of approval, the program shall include, amongst others, the deferral of loans and outstanding tax payments for cinemas from the cut-off date of 1 March 2020. Dunning procedures shall not be pursued further for the time being.

In addition, the German federal and state governments have implemented various aid programs for creatives, artists and the self-employed, which can be applicable to individuals working in the German film and media industry.

Hungary

Hungary ranks as Europe’s second most popular filming destination after the United Kingdom. The Hungarian government has introduced new regulations due to COVID-19, which provide tax exemptions for film, media and other entertainment industries and a moratorium on lease agreements concluded by legal entities from such industries, operating in Hungary:

1. Tax exemptions and tax reductions

The Hungarian government has introduced a number of sector-specific tax exemptions and tax reductions with respect to certain economic sectors. These tax exemptions and reductions are applicable – inter alia – to employers carrying out the following activities as their main activity:

  • motion picture, video and television program production, sound recording and music publishing activities;
  • programming and broadcasting activities; and
  • creative, arts and entertainment activities.

Employers conducting the above business activities are exempt from paying social contribution tax and vocational training contribution. In addition, the government has also introduced a temporary reduction of social security contributions normally deducted from gross salaries by employers by introducing a cap of HUF 7,710 (approximately EUR 20) per employee for the in-kind health insurance contribution, and by suspending the collection of pension contributions and labor market contributions.

The above temporary exemptions, reductions and tax base calculation rules will apply from March to June 2020. They are available on the condition that most, but at least 30% of the employer’s overall income of the past 6 months was realized as a result of one of the activities listed above and such activity was actually conducted as the main activity.

2. Ban of termination of lease contracts

In the tourism, catering, entertainment, gambling, film industry, performing arts, event organization and sporting services sectors, lease contracts for non-residential premises cannot be terminated by a party until June 30, 2020. The landlord may not raise rent until the end of the state of emergency.

Employers in the above sectors are exempt from the payment of wage taxes from March to June 2020, except for the in-kind health insurance contribution, which is capped at HUF 7,710 (approximately EUR 20) per employee per month.

Poland

The Polish government has amended the Act on Cinematography of 30 June 2005 and the Act on Financial Support of Audio-visual Production of 9 November 2018 (AFSAVP). The Law on Cinematography governs the ‘selective’ grant system available to producers, while the AFSAVP provides cash rebates to Polish co-producers and service providers:

  • Article 4, Section 1 of the Act on Cinematography amends the definition of a film. This means that those films that are not going to be shown in cinemas are still eligible for grants.
  • Article 18 Sections 2 and 7, Article 20 Sections 5 and 20 of the AFSAVP were amended. The amendments extend the period of the application for financial support, allow additional flexibility on the documents to serve as the basis for considering the application, the easement in the process of evaluating qualified costs and executing the appropriate contract. Moreover, the government has guaranteed that funding budgeted for the cash rebates will not be adjusted downwards.

In addition, operational programs of the Polish Film Institute have been amended to support producers during the pandemic, and a new system of stipends has been introduced for creative industry individuals.

Finally, as of 1 April 2020 the "Anticrisis Shield" Act, which implements special solutions for enterprises and employees in relation to the crisis caused by the pandemic, entered into force in Poland. These measures are also relevant to the film production industry.