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:
https://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=66292
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 type | UAH | USD |
| Feature film >=74 min | 8108000 | 324320 |
| TV or animation >=74 min | 2270240 | 90809.6 |
| Documentary >=52 min | 1418900 | 56756 |
| Commercial/Music Video >=20sec | 6810720 | 272428.8 |
| C/MV with 10% reinvestment | 3891840 | 155673.6 |
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
