France has expanded its tax credit for international film and audiovisual productions, allowing certain above-the-line costs to qualify while maintaining a 30% standard rate, a 40% rate for qualifying visual effects spending, and a EUR 30 million project cap.
The European Commission has approved changes to France’s tax credit for foreign film and audiovisual productions, with the State aid authorisation published in the Official Journal of the European Union on 29 July 2026.
The reform expands the scope of costs eligible for the tax incentive, including certain above-the-line expenses such as remuneration for non-European performers and hotel accommodation.
Tax credit remains at 30%, with 40% rate for major VFX spending
The tax credit is set at 30% of eligible French production expenditure, rising to 40% for live-action fiction projects that spend more than EUR 2 million on visual effects. The benefit is capped at EUR 30 million per project.
Foreign fiction and animation productions must work through a French executive production company and generally incur at least EUR 250,000 in qualifying French expenditure, or 50% of the production budget where the budget is below EUR 500,000. Fiction projects must also shoot for at least five days in France, while animation productions are exempt from the minimum shooting requirement.
Projects must comply with French labour rules and satisfy a points-based cultural test demonstrating links to French or European culture, heritage or territory.
Performer nationality restrictions removed
The revised provisions remove the previous strict French or European nationality or residency requirement for performers. However, eligible performer remuneration and related social charges are limited to 30% of the project’s total production budget.
The authorised scheme has also been extended through 31 December 2028. A grandfathering provision allows qualifying expenditure incurred after that date to remain eligible where provisional approval for the project was granted by 31 December 2028.
The changes follow lobbying efforts by major French and US film and streaming industry participants, including Netflix co-CEO Ted Sarandos and Paramount Skydance CEO and chairman David Ellison, seeking broader access to the French production incentive.
