The 25%+5% Cash Rebate formula starting January, 2020 is defined in a newly adopted law where 25% means general rebate while +5% refers to the production passing Cultural Test:

The procedure of application and assignation of tax rebate funds is written out in the law On State Support of Cinematography (Article 11). The outline of procedure looks like this:

1) a business entity seeking rebate should apply with a letter to State Film Agency before the production is complete to obtain a preliminary evaluation of the project

2) the following papers should be attached:

  • shooting script
  • production scheduled
  • budget breakdown
  • State Register records & copy of Statute of Ukrainian counterpart company
  • crew & cast lists
  • a guarantee letter of compliance to Article 12 of this law
  • a processing fee receipt

The minimum qualified spend is calculated based on Cost of Living index on month-to-month basis and currently approximates to:

Film typeUAHUSD
Feature film >=74 min8108000324320
TV or animation >=74 min227024090809.6
Documentary >=52 min141890056756
Commercial/Music Video >=20sec6810720272428.8
C/MV with 10% reinvestment3891840155673.6

The terms of application processing are outlined as following:

  • 2 days for State Film Agency to submit the application to the Council of State Cinema Support
  • 30 days for the Council to return an eligibility & Cultural Test record
  • 1 year since completion of production for eligible business entity to claim the rebate from Film State Agency.
  • 30 days for the Council to evaluate the final rebate claim & 40 days for State Film Agency to confirm the rebate
  • 10 days for the State Film Agency to implement payout upon the decision

3) To claim the rebate the eligible business entity should provide:

  • production budget
  • agreement with Ukrainian counterpart
  • certificates of completion of related works with specification of qualified expenditures along with primary accounting papers
  • a guarantee letter stating no changes were made in script / crew list / other inputs which were the base for eligibility / culture test
  • general production report
  • audit of qualified expenditures

4) The qualified expenses for state rebate are outlined as following:

  • salaries & other crew and cast payouts
  • purchase of goods & services
  • rent of properties & facilities.
  • VFX/CGI works are exempt of Cultural Test if minimum 50% of the staff involved in its production on territory of Ukraine are Ukrainian citizens

The unqualified expenses are outlined as following:

  • wear and tear expenses
  • negotiation/representation costs
  • non-production operational costs
  • distribution costs
  • travel costs outside Ukraine
  • salaries and other crew / cast payouts which are not subject to taxes in Ukraine