A package of Italian tax incentives for the film industry got the green light from the European Commission under State Aid rules, but has questioned the availability of a tax credit for installing digital projection equipment in Italian cinemas.

The key to the success of the tax incentives was the emphasis on European cultural films and supporting the distribution of such films. Apparently such targeted incentives are compatible with the cultural derogation of the EC Treaty. ENews readers may recall that Hungary had a similar experience in securing incentives for its cultural film industry around about this time last year – a triumph of Lolek and Bolek over Shrek you might say.

Less clearcut is the acceptability of the proposal to grant a 30% tax credit for installing digital projection equipment in Italian cinemas. Apparently the Commission has concerns that the measure may mainly benefit large multiplexes which should need less support, but have yet to take a final decision on the proposed measure.