Italy’s Tax Incentive Scheme for International Film Industry : An on Going Evaluation of Impact

A film production company is always in search of cost effective solutions during the film preparation phase, especially deciding where, when and for how many weeks the shooting will take place. All European countries have implemented tax schemes or other financial measures aimed at attracting international projects, mainly US productions. Italy has been able to catch up only in 2007, by introducing in the yearly financial law (244/2007) a bunch of fiscal measures, among which a 25% tax credit on production costs incurred in Italy and other European countries in connection with foreign productions. The tax credit can be offset against the production company fiscal debt during production resulting in an actual saving. The effort of Italian Government and Parliament has therefore been addressed to encourage inward investments and shooting in Italy. As a result, huge mainstream films have been shot in various Italian locations throughout 2009 and 2010, bringing the Studios back to Italy after a long period of absence. The aim of this work is to provide a first evaluation of the impact of these productions, at an economic and communication level, as well as to assess if and how positive the effect can be considered. Starting from the figures and data emerging from the existing new experiences, the paper estimates the new value added produced by Italian companies and the amount of direct expenses in domestic goods and services made by International companies. Finally the work tries to contribute to the international debate on the film-induced tourism and its multiplier effect on the territory