Film Scheme

A natural studio.

Film Scheme in Cyprus

The government of the Republic of Cyprus introduced a package of incentives encouraging international producers to choose Cyprus as their next film destination. In specific, production companies that opt to Film Scheme in Cyprus will be able to choose between cash rebate or tax credit and can also benefit from tax discounts on investments made on equipment and infrastructure, and VAT returns on expenditure in scope.

Qualifying production categories include, amongst others, feature Films (including animation), television Series or mini-series, documentaries for Theatrical or Television release, animation (digital or analogue), television research programs and natural history.

Location and Landscape.

Located at the eastern end of Europe, Cyprus, is at the crossroads of three continents, Europe, Africa and Asia in close proximity to diversified civilizations and settings. Its pleasant Mediterranean climate offers year-round sunshine making it possible to enjoy the sun every single day.

The stunning coastlines, golden sandy beaches and clear blue waters coexist harmoniously with glorious mountains of wild natural beauty and peaceful, picturesque villages making the island a unique natural film studio in itself.

Over the years, Cyprus has developed a unique character, that reflects the influence of the different civilizations that have ruled the island, leaving their mark from a Stone Age settlement to a modern and thriving European Union State.

Incentives for producers.

Cash rebate.

Rebate of up to 35% of eligible expenditures incurred in Cyprus will be granted, where the amount will depend on the score of the production at the cultural test.
The rebate will be given once filming is completed, on receipt of the audit report and its review by the committee.

Tax Credit.

As an alternative to cash rebate, tax credit, offers a reduction of the corporate tax liability of the company responsible for the implementation of a production, with the same criteria that apply for cash rebate.
The sum of the tax credit against the taxable income shall not exceed 50% of the Applicants’ taxable income for the tax year within which the production is made.
The tax credit, to the extent that it is not granted due to the above percentage restriction, shall be carried forward and be given within the next five years, subject to the above percentage restriction.

Tax discount for investment in Infrastructure and equipment.

Any small and medium-sized enterprise subject to a tax liability in Cyprus investing in cinematographic infrastructure and technological equipment will be entitled to deduct the amount of its investment from its taxable income.

The aid may not exceed 20% of the qualifying production expenditures in the case of small enterprises and 10% of the qualifying production expenditures in the case of medium-sized enterprises.

The investment where it relates to equipment should remain in the territory of Cyprus for a period of at least 5 years.

VAT refund on expenditures

For qualifying production expenditures incurred in Cyprus by natural or legal persons from third countries and which are related to the implementation of productions, the company is entitled to a refund of VAT.

Value Added Tax rates in the Republic of Cyprus are 19%, 9% and 5% on all products and services provided in the Republic of Cyprus and 19% and 5%, on all taxable imports.

VAT returns arise within 6 months with respect to the legal person which carries out the foreign filming in Cyprus from the end of the last deadline for submitting the VAT declaration for the specific VAT period during which the expense occurred or from the date on which the application for VAT return is filed.

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