CINEMATIC CASHBACK INCENTIVE

On December 18, 2023, the memorandum of cooperation to develop Armenian film production was signed between the Ministry of Education, Science, Culture and Sports of the Republic of Armenia, the Permanent Commission of the National Assembly of the Republic of Armenia for Science, Education, Culture, Diaspora, Youth and Sports, the National Film Center of the Republic of Armenia and ‘People of AR’ LLC.

The development of Armenian film production is closely connected with the legal creation of favorable conditions for such development. For example, the partial return of investments (Cash rebate) is serves as a favorable condition and according to par. 23.1 of Article 3 (1) of the Law of the Republic of Armenia ‘On Cinematography’ is considered a partial refund of monetary costs incurred by film producers for goods and services directly related to film production purchased from residents of the Republic of Armenia.

According to the specified Law, 10-40 % of the money invested in film production can be recovered if:

1) the film producer requested the national authority to return the investment,

2) documents are available to substantiate the expenses directly related to film production,

3) the national authority has submitted a positive opinion to the authorized public body on the partial return of investments.

The expenses subject to partial return of investments do not include the costs of goods, services and works performed in the amount of financial resources allocated to the given film production, if available.

The application for partial return of investment shall be rejected if:

1) evidence has been found to support the submission of false information or documents,

2) submitted documents do not meet the requirements of the Law of the Republic of Armenia ‘On Cinematography’,

3) the documents submitted are incomplete and the defects are not corrected within 10 working days of notification,

4) the producer, in the course of his activities, has destroyed or damaged a monument of history or culture protected by the State, an object or document of special historical or cultural value, an archaeological object, a natural territory or object, Specially protected by the State, as defined by legislation, which has caused such large-scale property or other significant damage under criminal law, or has refused to compensate for damage to the property of State or private persons, or restore it to its former state,

5) The national authority issued a negative opinion on the basis of the controls established by law.

The partial return of investments shall be terminated and the allocated funds shall be credited back to the state budget, if, as a result of the control of the national body or other substantiated facts, it is found that the film producer who has received (received) compensation,

1) provided false information or forged documents,

2) have violated the requirements of this Law of the Republic of Armenia ‘Cinematography’ and other normative legal acts,

3) in the production of films, has committed an act entailing administrative or criminal liability by which he caused damage to the State, legal or natural person, or has caused partial or total destruction of property, or has committed an act, Not provided for in the documents authorizing film production and not agreed with the relevant authorities.

Partial return of investments shall be carried out, rejected, terminated and returned to the State budget by decision of the authorized State body on the basis of the opinion of the national body or a court act that has entered into force.

The Minister of Education, Science, Culture, and Sports of the Republic of Armenia Zhanna Andreasyan has highlighted extensive collaborative efforts in drafting by-laws to expedite the implementation of partial return of investments.

Therefore, we call for close attention to the institution of partial return of investments (Cash rebate).

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