Cyprus Film Incentive Scheme – How to Benefit from Up to 45% Rebate

Introduction

Are you planning to shoot your next film, TV series, or animation project in Europe? Cyprus offers one of the most competitive film incentive schemes in the EU, with cash rebates of up to 45% and tax credits up to 35% on eligible production expenses. Combined with Cyprus’s stunning locations, 300 days of sunshine, and a 12.5% corporate tax rate, this is an ideal destination for international film producers.

In this guide, we explain how the Cyprus Film Incentive Scheme works, what benefits you can claim, and how to structure your project to maximize tax savings.

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What Is the Cyprus Film Incentive Scheme?

The Cyprus government, through Invest Cyprus and the Cyprus Film Commission, offers financial incentives to attract foreign and local film productions. These incentives include:

• Cash Rebate: Up to 45% of eligible expenditure incurred in Cyprus.

• Tax Credit: Up to 35% of qualifying expenses, limited to 50% of taxable income.

• VAT Refund: Reclaim up to 19% VAT on qualifying local costs.

• Investment Deductions: Additional incentives for innovative projects and SME investments.

This scheme applies to feature films, TV series, documentaries, and animation projects that meet the cultural test and minimum expenditure requirements.

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How Much Can You Claim?

There are two main options, and you must choose one:

1. Cash Rebate – Up to 45%

• Direct refund in cash after production and audit.

• Paid within 90 business days of final approval.

• Ideal for productions that need immediate liquidity.

2. Tax Credit – Up to 35%

• Deduction from taxable income (up to 50% of taxable income per year).

• Unused credit carried forward for 5 years.

• Suitable for companies expecting significant profits in Cyprus.

Example

Production Budget: €2,000,000
Eligible Spend in Cyprus: €1,500,000

• Cash Rebate (45%): €675,000 refund after audit.

• Tax Credit (35%): €525,000 deduction from taxable income (subject to cap).

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Additional Benefits for Film Producers in Cyprus

• VAT Refund on eligible expenses.

• 12.5% Corporate Tax Rate – one of the lowest in the EU.

• 0% Withholding Tax on dividends to non-residents.

• Investor incentives under Article 9A for innovative SMEs (valid until 31 Dec 2026).

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Does the IP Box Regime Apply to Films?

The Cyprus IP Box Regime offers an effective tax rate of 2.5% on IP income. However, film copyrights do not qualify under the IP Box unless you develop proprietary technology or software during production (e.g., animation engines, VFX tools).

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Why Choose Cyprus for Film Production?

• Strategic location with access to Europe, Middle East, and Africa.

• English-speaking professionals and skilled crews.

• Competitive tax regime and transparent legal framework.

• Beautiful landscapes and diverse shooting locations.

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How to Apply for the Cyprus Film Incentive Scheme

1. Incorporate a Cyprus production company (SPV).

2. Apply for pre-approval with Invest Cyprus.

3. Pass the cultural test and meet minimum spend thresholds:

   • €200,000 (feature films)

   • €100,000 (TV drama)

   • €50,000 (documentary)

4. Complete production and submit an audited cost report.

5. Receive a cash rebate or claim a tax credit on your tax return.

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Get Expert Help

At Rightax, we assist production companies with:

• Incorporation and structuring in Cyprus.

• Application for film incentives.

• VAT refund and tax planning.

• Investor support and additional incentives.

Contact us today to plan your next production in Cyprus.

Reach out for expert help with tax, accounting, audit, or company setup in Cyprus.

+357 99 108 510

[email protected]