As global TV and film production enters a new era, financing a project in 2024 has become more challenging than ever before. Buyers at major markets like Cannes’ MIPCOM may still be dazzled by premium content, but behind the scenes, assembling the final pieces of a production’s budget is like completing a complex jigsaw puzzle. A combination of the global recession, streamer cutbacks, rising costs, and intense competition has made securing 100% financing feel more difficult than ever. Enter the critical role of tax credits—an increasingly vital tool in ensuring productions get across the finish line.

Tax Credits: The Lifeline for Global Productions

Once viewed as a nice bonus, tax credits have now become essential to getting most film and television projects off the ground. Productions are relying heavily on these rebates to cover rising costs, with nearly every international show now requiring a hefty chunk of its budget to come from these credits.

“Since 2022, the landscape has shifted dramatically,” says Fabrice Delville of Beside Tax Shelter, one of the top organizations helping productions navigate Belgium’s thriving tax system. “U.S. platforms are cutting production volumes, and Public Service Broadcasters (PSBs) can’t cover the budget gaps due to inflation.” This is where tax credits come in, often bridging that final 10-20% investment needed to greenlight a project.

A Global Shift in Production Locations

With American tax incentives becoming less competitive, international productions are increasingly drawn to countries with attractive credits. Netflix’s “Wednesday,” for example, moved production for its second season to Ireland to take advantage of the nation’s favorable incentives. Similarly, European countries like Belgium, the Canary Islands, Cyprus, and Hungary have become hotbeds for productions chasing better deals.

“Tax credits are the reason why so many American shows are being shot abroad,” says one U.S. indie producer. “Shooting in the States has simply become too expensive.”

The Race to Offer Competitive Incentives

Countries across the globe are fiercely competing to provide the best tax credit systems to lure productions. While credits range from 20% to as high as 50% in places like the Canary Islands, nations are continually adapting their systems to remain competitive. Belgium’s tax credit system, for example, offers an edge by guaranteeing funds to productions before filming begins, reducing cash flow risks for producers.

Meanwhile, territories like Italy and Poland have experienced turbulence in their tax credit policies, with inconsistent offerings causing disruptions in production planning. In contrast, more stable systems in regions like Malta and Hungary continue to draw large-scale projects, ensuring a steady stream of content and economic benefits for the local film industries.

Challenges for U.S. Studios

While international tax credits are proving beneficial for many, they pose challenges for American studios trying to maintain domestic production. California, once the heart of global filmmaking, is finding it increasingly difficult to compete with more aggressive international incentives. This has driven American buyers and producers to seek out opportunities abroad, chasing the financial advantages offered by tax rebates.

Philipp Kreuzer of Maze Pictures, who has worked on productions like Nine Perfect Strangers, explains: “You need to maximize incentives without burning too much money along the way. It’s about finding the balance and making the production work financially.”

The Future of Financing in TV and Film Production

As tax credits become more integral to production financing, the competition among countries will only intensify. Territories with the most reliable, lucrative, and quick-to-pay tax systems will become production hubs for the global entertainment industry. And as U.S. platforms scale back production volumes, producers will increasingly need to rely on savvy financial strategies and international partnerships to get their shows made.

Ultimately, tax credits are now the lifeblood of the entertainment industry, offering producers the flexibility and financial security they need to deliver their projects on time and on budget. But with the shifting sands of the global production landscape, the key to success lies in understanding which regions can offer the best deals—and being ready to move when opportunity strikes.