Lights, Camera, Action! How Tax Breaks and Funding Can Lure Film Productions to Germany
The panelists on stage at the law firm Greenberg Traurig for a discussion held in conjunction with the Motion Picture Association during the 74th Berlin International Film Festival represented a notable list of luminaries from across the film and television industry. Mediated by Greenberg Traurig Partner Laura Zentner, they were largely in agreement regarding the panel’s topic, German film funding in 2025 and beyond. The panel members emphasized that filming in Germany, from infrastructure to local talent, is excellent, but navigating the associated bureaucracy — which will get worse if the new proposal comes to pass — is not.
As panelist Stan McCoy, the President and Managing Director of the MPA EMEA, joked, the MPA’s member studios “don’t make film and television as a regulatory compliance exercise.” However, the federal bill currently under consideration, and which, if passed, would come into effect in 2025, includes a tax incentive model and an investment obligation, the latter of which would require both German and foreign studios to invest 20% of their sales generated in Germany back into European productions. Thanks to “a maze of sub-quotas,” which include a limit on IP to five years, as well as a requirement that 70% of the work created in German under the 20% investment rule be in German, the bill risks making it significantly more complicated to let creatives focus on making content audiences will want to watch.
There was also a concern on stage that the mandate for German language content was redundant. “Weirdly, the regulation would be forcing international streamers into competition with German domestic broadcasters,” McCoy pointed out, “making the kind of content that German domestic broadcasters are already very good at making.” Wolf Osthaus, the Senior Director of Public Policy at Netflix for the DACH, Benelux, and Nordics, agreed. He noted that the proposed regulation would risk depriving companies like Netflix of flexibility (and that Netflix has already spent over 500 million euros in recent years on German-language content, “and we have no intention to do less.”) Furthermore, the potential funding law won’t necessarily strengthen Germany as a filmmaking hub, despite this being one of the key aims of the proposed regulation. “If we were obliged to do more in the German language, we could still do it wherever we want in the European Union,” Osthaus said.
But the panelists also agreed that Germany is an attractive production location where studios and international streamers would like to do more, not less. What Ashley Rice, the President and Co-Managing Partner of Cinespace Studios, who also spoke on behalf of Studio Babelsberg, argued is that Germany already has what the studios need, from great infrastructure to a talented workforce — but production in the country is limited enough that crew wind up leaving. “I’ve worked with many Germans overseas who I’m sure would love to come home,” Rice said. Studio Babelsberg and Cinespace Studios recently announced their partnership. “The expertise is here. So we just need to create an environment that really puts it on a map, competitively.” Veronica Sullivan, the Senior Vice President, Head of Global Production External Affairs and State and Local Government at NBCUniversal, cited the recent production of Pitch Perfect: Bumper in Berlin, which hired over 700 local workers, an indication of the level of talent in the country. “All the elements that go into making a production destination work were all here, and it was wonderful. Getting here, on the other hand, was a little challenging,” she said, primarily due to the difficulty of planning around the peculiarities of Germany’s current funding structure for in-country productions.
What, then, will make the country more attractive to studios and international streamers? When Conrad Clemens, Saxony’s State Secretary who gave the panel’s State of Play speech, declared that “we want to win productions to come to Germany,” the entire room broke into applause. The desire is there, and the solution, among the panelists, is clear: a competitive tax incentive on par with neighboring countries. In his opening remarks, the chairman and CEO of the MPA, Charles Rivkin, mentioned that “just next door in Poland, investment in original European content by both streamers and broadcasters in 2022 hit $679 million,” thanks to a combination of a 30% tax incentive and a relatively small investment requirement on streamers, amounting to a 1.5% film fund levy. The panelists were also enthusiastic about Spain, currently one of the most popular places to film in the EU, which has a manageable 5% investment obligation. The speakers also mentioned Austria, which just introduced a new tax incentive and put the discussion of investment requirements on hold. “There is wide agreement that we need the tax incentive,” in Germany, Osthaus said, “and we need it quickly.” Panelist Thomas Hacker, a member of the German Parliament and the Media Policy Spokesperson for the FDP Bundestag group, also pointed out that there’s flexibility regarding a tax incentive. “If it will not do as we all expect, then we can discuss in five years or later on,” he said. He also made clear that his party opposes an investment obligation.
The panelists were also clear that a tax incentive decoupled from an investment obligation (or coupled with a lower, less complex version of what’s currently on the table) would be an economic benefit to the country. Over the course of filming Pitch Perfect: Bumper in Berlin, Sullivan said, the production worked with 650 small businesses across all the country’s Länder (the sixteen federal German states). And production creates entirely new jobs, as Leon Forde, the Managing Director of Olsberg-SPI, pointed out. “A great case study of that is the UK, which has seen incredible growth in different regions, like Northern Ireland with Game of Thrones.” Sullivan also mentioned a recent meeting with representatives from the German states, who voiced concerns that increased production would primarily be focused in Berlin. “I just think it’s really important for people to look at other jurisdictions around the world and see how they’ve spread,” she said. Rice concurred. “There are states next to New York with a very competitive incentive. Who would have ever thought we’d be shooting in New Jersey? Well, it does spread out.”
Germany has a great history of filmmaking, and different legislation than what’s currently on the table would be a way to double down on that legacy. And just as significant, the panelists seemed to agree the economic benefits of increased production would justify a more competitive tax incentive. As Forde pointed out, “pretty much every government is looking to the creative sector for the future of its economy.”
Featured image: Motion Pictures Association Chairman and CEO Charlie Rivkin.
