On 16 October 2019, the President of Ukraine signed the law, which entitles foreign filmmakers to receive compensation for the production costs incurred on Ukrainian territory.
In order to attract foreign film producers to Ukraine, the law offers cash rebates, which vary from 4.5% to 25% of eligible expenses (i.e. direct production expenses such as employee salaries) depending on certain criteria and type of expenses.
Generally, there are two types of cash rebates in Ukraine to cover (i) production expenses, and (ii) fees of actors and film crew members who are non-residents and operate or live abroad, provided such fees are taxable in Ukraine (operational expenses).
A producer can receive a rebate of 25% of eligible expenses if the following cumulative criteria are met:
- expenses are fully or partially incurred in favour of a company registered in Ukraine;
- the film complies with all requirements of duration and total amount of incurred eligible expenses (with eligibility depending on the type of film);
- the film meets a cultural test qualification; and
- the foreign producer has entered into a production agreement for all or part of the film with a Ukrainian company that operates in the cinematographic industry and is a registered VAT payer.
Foreign producers can receive an additional 5% rebate for satisfying additional criteria, such as launching a production based on a Ukrainian literary work.
An available amount of recovery of the operational expenses is:
- 10% if taxes on these fees are paid in the cities of Kyiv and Sevastopol; or
- 4.5% if taxes on these fees are paid elsewhere in Ukraine.