Film and Audiovisual Tax Credit: What’s Changing Under the 2025 Budget Law
Budget Law 2025: With the approval of Law No. 207/2024, the tax incentives for the audiovisual and film sectors have changed. New thresholds, more stringent selection criteria, and a strengthened role for the state in managing rights to works have been introduced. Greater selectivity, public rights, and digitalization are in place.
With the approval of the 2025 Budget Law (Law no. 207/2024), the Italian film and audiovisual sector faces a significant turning point in the regulation of tax incentives , in particular with the introduction of new methods for accessing tax credits and a strengthening of the public role in managing the rights to financed works.
Reform of Law 220/2016: all articles affected by the restyling
Paragraph 869 of the 2025 Budget Law amends seven key articles of the film legislation, revising funding, credits, selective contributions, and digitalization.
The heart of the reform lies in paragraph 869 of the enacting law, consisting of seven letters (a) to g), which addresses various articles of Law No. 220/2016 , the framework law on cinema and the audiovisual sector. The amendments concern both financial instruments such as funds and tax credits, as well as cultural and strategic interventions, such as the digitization and promotion of audiovisual heritage.
The articles under review are 7:
Art. 12 – Objectives and types of intervention;
Art. 13 – Investment Development Fund;
Art. 15 – Tax credit for production companies;
Art. 21 – Common provisions on tax credits;
Art. 26 – Selective contributions for projects of high cultural value;
Art. 29 – Extraordinary plan for digitalisation;
Art. 32 – Public register of works.
New tax credit rules for manufacturing companies
Flexible rates and differentiated criteria: how the tax credit for producers is changing.
The tax credit will no longer be fixed but variable between 15% and 40%, with access subject to quality, size, and territorial requirements. The favorability for European and independent productions is highlighted.
One of the most innovative aspects concerns Article 15, regarding the tax credit for film and audiovisual production companies. The new mechanism provides for a variable range between 15% and 40% of production costs, leaving ample room for discretion to secondary legislators via ministerial decree .
Towards a more strategic and meritocratic tax incentive
The 40% ceiling is no longer guaranteed: ministerial decrees will calibrate the rate based on the type of project and the beneficiary, highlighting its cultural impact and economic sustainability. Adjustment will be based on qualitative and dimensional criteria.
The credit will be modulated according to objective parameters such as:
Size of the company or group;
Eligible costs and maximum spending thresholds;
Distribution type (cinema, TV, OTT platforms);
Involvement of national broadcasters or international co-productions;
Membership of the company in the European Union and production independence.
This selective approach reflects a European trend toward focusing public resources on culturally significant and industrially sustainable projects. In France, for example, the Centre National du Cinéma (CNC) has been implementing a similar selective support system for years, aimed at strengthening the diversity of its offerings.
A specific ceiling is introduced for the compensation paid to the artistic and technical figures involved in production.
The goal is to avoid imbalances in the distribution of tax benefits and promote transparency. Towards a more "smart" tax credit.
The 40% cap will no longer be the rule, but the exception, reserved for strategic production. The tax credit thus becomes a smart incentive , designed to reward quality, innovation, and a strong connection to the European industrial fabric.
New common rules for credit: tightening professional fees and increasing transparency
Substantial changes also affect Article 21, which governs the common rules for allocating tax credits to all stakeholders in the supply chain (production, distribution, operation, post-production). Subparagraph 869, letter d), introduces a new limit on professional fees eligible for tax credits.
The limit applies exclusively to production companies ;
It is parameterized according to the indications of Legislative Decree 201/2011, art. 23-ter ;
It takes into account the type of work and the nature of the performance (e.g. acting, directing, technical).
The measure aims to prevent a significant portion of the tax benefit from being absorbed by high fees, instead ensuring a more equitable distribution of resources throughout the entire production process.
Strategic innovations: state rights, selectivity, and digitalization
The State becomes co-owner of rights: the public funding paradigm changes
The law provides for the possibility of state participation in the proceeds of funded works. This is a first for the Italian system, designed to make the film fund more autonomous and self-financing.
1. Rights of works: the State becomes co-owner
For the first time, the legislation introduces the possibility for the State to acquire a share of the economic rights of works financed through tax credits. The financial return from this share will be reinvested in the Film and Audiovisual Fund , with the aim of making the system self-financing and circular .
This measure recalls the German model of the Filmförderungsanstalt (FFA), where public intervention can involve forms of profit sharing.
2. Doubling of resources for selective contributions
More funding for selection and promotion: space for innovative and quality projects
The Film Fund's share of direct support for works of cultural value has been increased to 30%. This is a clear signal to the promotion of creative excellence and expressive diversity.
The percentage of the Fund's resources allocated to selective grants and promotion increases from 15% to 30% . This increases support for:
Works of high artistic and cultural value;
Experimental and independent projects;
International promotion initiatives.
3. Permanent digitization of the audiovisual heritage
Continuous digitization: 3 million a year to save audiovisual memory
The heritage digitization plan becomes structural and permanent. This is a key measure to protect Italy's cultural identity and expand the accessibility of our historical audiovisual archives.
The Digitalization Plan becomes structural, with an annual allocation of €3 million starting in 2025. The goal: to ensure the preservation, accessibility, and enjoyment of Italy's audiovisual heritage. This strengthens the commitment to modernizing the sector and preserving collective cultural memory.
Conclusions: towards a more sustainable and competitive ecosystem
The 2025 tax credit reform marks a decisive step towards a more selective, sustainable, and strategic financing system, in line with European best practices. The introduction of flexible tax rates, public rights sharing, cost containment, and enhanced promotion and digitalization lay the foundation for a more robust, international, and culturally relevant audiovisual industry.
Italian cinema, supported but also empowered, is now called upon to respond with quality, innovation, and industrial vision, consolidating its position on the global scene.