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ACT NO 43/1999 ON TEM­PO­RARY REIM­BURSE­MENTS IN RESPECT OF FILM MAK­ING IN ICELAND

CHAPTER I

Objectives. Scope.

Article 1

The objec­tive of this Act is to con­tribute to the fur­ther­ance of domes­tic cul­ture and the pro­mo­tion of Ice­land's his­tory and nat­ural sur­round­ings through tem­po­rary sup­port for film and tele­vi­sion pro­grammes pro­duced in Iceland.

Article 2

Authorisation is granted for the reim­burse­ment from the Trea­sury of a pro­por­tion of the pro­duc­tion costs incurred in the pro­duc­tion of films and tele­vi­sion pro­grammes in Ice­land. The cal­cu­la­tion of the reim­burse­ment is based on the total cost of pro­duc­ing films or tele­vi­sion pro­grammes, irre­spec­tive of which part of the pro­duc­tion gen­er­ates that cost.

If more than 80% of the total cost of pro­duc­ing a film or tele­vi­sion pro­gramme is incurred in Ice­land, the reim­burse­ment shall be based on the total pro­duc­tion cost incurred in the Euro­pean Eco­nomic Area.

Production costs refers to all expense that is incurred in Ice­land and is eli­gi­ble for deduc­tion from oper­at­ing rev­enues pur­suant to the Income Tax Act. Wages and pay­ments to inde­pen­dent con­trac­tors are only con­sid­ered pro­duc­tion costs if they are ver­i­fi­ably taxed in Iceland.

 

CHAPTER II

Applications

Article 3

Applications for reim­burse­ment of pro­duc­tion costs shall be sent to the Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion; cf. Para­graph 2. Appli­ca­tions for reim­burse­ment, together with accom­pa­ny­ing doc­u­ments, shall be received before pro­duc­tion begins in Iceland.

The Min­is­ter shall appoint a Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion, to which the Min­is­ter in charge of film and the Min­is­ter in charge of Gov­ern­ment finances shall each appoint one rep­re­sen­ta­tive, and the third mem­ber shall be appointed with­out nom­i­na­tion and shall chair the Com­mit­tee. Alter­nates shall be appointed in the same man­ner. The chair­man shall have the decid­ing vote in the event of a tie.

The Com­mit­tee pro­vided for in Para­graph 2 shall review appli­ca­tions for reim­burse­ment. If the Com­mit­tee con­sid­ers an appli­ca­tion to have sat­is­fied the con­di­tions for reim­burse­ment for film pro­duc­tion, it shall pro­vide the appli­cant with a pledge of reim­burse­ment; oth­er­wise, it shall reject the application.

 

Conditions for reimbursement

Article 4

The fol­low­ing con­di­tions shall be sat­is­fied when an assess­ment is made of whether a por­tion of the pro­duc­tion costs of a film or tele­vi­sion pro­gramme shall be reimbursed:

  1. the pro­duc­tion con­cerned is con­ducive to advanc­ing Ice­landic cul­ture, pro­mot­ing Ice­landic his­tory or nat­ural envi­ron­ment, or enhanc­ing the expe­ri­ence, exper­tise, and artis­tic ambi­tions of the par­ties involved;
  2. the account­ing and set­tle­ment for each pro­ject is clearly seg­re­gated from other pro­jects so that it is always pos­si­ble to iden­tify the costs asso­ci­ated with each pro­ject individually;
  3. information on the main par­ties to the pro­duc­tion of the film or tele­vi­sion pro­gramme has been made available;
  4. information on domes­tic par­ties and their share in the pro­duc­tion of the film or tele­vi­sion pro­gramme has been made available;
  5. an itemised esti­mate of pro­duc­tion costs and financ­ing has been made avail­able, together with con­fir­ma­tion from financ­ing agents and a report from the appli­cant ver­i­fy­ing that the pro­duc­tion is con­sis­tent with the objec­tives of the Act;
  6. information on the sub­ject of the pro­posed film or tele­vi­sion pro­ject, such as a script and infor­ma­tion on film­ing loca­tions, has been made available;
  7. information on how pub­lic dis­tri­b­u­tion will be han­dled has been made available;
  8. the sub­ject of the film or tele­vi­sion pro­gramme is not in vio­la­tion of leg­is­la­tion on film inspec­tion, pro­hi­bi­tions on vio­lent films, or the pro­vi­sions of the Gen­eral Penal Code on pornography;
  9. there are no taxes or levies in arrears to the State or local author­i­ties or any other unpaid claims in Ice­land in con­nec­tion with the production;

Should there be a change in the esti­mated pro­duc­tion costs (cf. Para­graph 1, Item (f)) after pro­duc­tion com­mences, a new cost esti­mate shall be sub­mit­ted to the Com­mit­tee on Reim­burse­ment for Film Production.

In assess­ing appli­ca­tions for reim­burse­ment, the Com­mit­tee described in Arti­cle 3 shall be autho­rised to obtain an expert opin­ion on the con­di­tions for the reimbursement.

 Advertisements and news mate­ri­al, short films, record­ings of ath­letic and enter­tain­ment events, mate­r­ial intended pri­mar­ily for the pro­mo­tion of spe­cific goods or ser­vices, and mate­r­ial intended pri­mar­ily for show­ing in own dis­tri­b­u­tion net­works shall not qual­ify for reim­burse­ment pur­suant to this Act.

 In the event that the pro­duc­tion of film or tele­vi­sion pro­gramme is not com­pleted within three years from the date the pledge is granted for reim­burse­ment pur­suant to Arti­cle 3, the approval shall lapse. Under extra­or­di­nary cir­cum­stances, the Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion pro­vided for in Arti­cle 3 may grant an exemp­tion from this con­di­tion for a max­i­mum period of five years from the date the pledge was granted.

 

CHAPTER III

Reimbursements

Article 5

The reim­burse­ment of pro­duc­tion costs shall equal 25% of total pro­duc­tion costs pur­suant to Arti­cle 2.

Requests for dis­burse­ment shall be sub­mit­ted to the Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion. The Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion shall deter­mine the reim­burse­ment pur­suant to Arti­cle 3. If the request is received after six months have passed from the end of the pro­duc­tion of the film or tele­vi­sion pro­gram­me, the request shall be denied.2) Re­im­burse­ments are sub­ject to the con­di­tion that the appli­cant main­tain records of the costs for which reim­burse­ment is request­ed, in accor­dance with the Account­ing Act and the Annual Accounts Act. Pro­duc­tion costs are all expenses that may be deducted from rev­enues deriv­ing from com­mer­cial activ­i­ties accord­ing to the pro­vi­sions of the Income Tax Act and incurred in Ice­land or, depend­ing on cir­cum­stances, in another Euro­pean Eco­nomic Area mem­ber state; cf. Arti­cle 2, Para­graph 2. Fur­ther­more, the appli­can­t’s board of direc­tors and man­ag­ing direc­tor shall con­firm that the set­tle­ment of costs is in com­pli­ance with the pro­vi­sions of this Act and reg­u­la­tions issued on the basis of it. If the reim­burse­ment exceeds ISK 20 mil­lion, the set­tle­ment of costs shall also be audit­ed. In ver­i­fy­ing the set­tle­ment of costs, the Com­mit­tee ref­er­enced in Arti­cle 3 may request appro­pri­ate infor­ma­tion from the tax author­i­ties and from the com­pa­ny’s accounts. If the set­tle­ment of costs and/or the sup­port­ing doc­u­ments are unsat­is­fac­to­ry, the Com­mit­tee shall grant the appli­cant a grace period for the sub­mit­tal of sat­is­fac­tory data. If the Com­mit­tee does not receive sat­is­fac­tory data by the spec­i­fied dead­line, or if the data in the case indi­cate that the set­tle­ment of costs is not in com­pli­ance with the pro­vi­sions of this Act, it shall reject the request for reimbursement.

Article 6

Means of appeal

The deci­sion of the Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion pur­suant to Arti­cles 3 and 5 may be appealed to the Min­istry; cf. Arti­cle 26, Para­graph 1 of the Admin­is­tra­tive Pro­ce­dures Act.

The deci­sion of the Com­mit­tee pur­suant to Arti­cle 5 con­cern­ing what is con­sid­ered to be pro­duc­tion costs pur­suant to Arti­cle 2, Para­graph 3; the amount of the reim­burse­ment; or what is con­sid­ered to be the total pro­duc­tion costs may be appealed to the State Inter­nal Rev­enue Board.

The dead­line for an appeal pur­suant to Para­graphs 1 and 2 is 30 days, cal­cu­lated from the date of the deci­sion by the Com­mit­tee on Reim­burse­ment for Film Production.

Article 7

If the appli­cant has received a grant from pub­lic enti­ties for the pro­duc­tion of the same film or tele­vi­sion pro­gram­me, the amount of the grant shall be deducted from the amount con­sid­ered domes­tic pro­duc­tion costs.

The com­bined amount of grants from pub­lic enti­ties and the total amount of the reim­burse­ment pur­suant to Arti­cle 5 shall not exceed 85% of the total pro­duc­tion costs of the same film or tele­vi­sion programme.

CHAPTER IV

Article 8

The Min­is­ter shall issue a Reg­u­la­tion con­cern­ing the imple­men­ta­tion of this Act. It shall con­tain pro­vi­sions on, among other things, the pro­ce­dures for reim­burse­ments pur­suant to this Act; the autho­ri­sa­tions of the Com­mit­tee on Reim­burse­ment for Film Pro­duc­tion to defer reim­burse­ments that may be in excess of the fund­ing allo­cated by Par­lia­ment at any given time; the con­di­tions for reim­burse­ments; seg­re­ga­tion of accounts pur­suant to Arti­cle 4, Para­graph 1, Item(c); appli­ca­tions; han­dling of appli­ca­tions; and deci­sions on reimbursements.

Entry into force

Article 9

This Act shall enter into force at once. The Act shall expire on 31 Decem­ber 2021. Reim­burse­ments approved before that data shall remain in effect, how­ev­er.