30th June 2023

Q&A with Thanos Leontaris of Ratio Legal Services

In the last year alone, Lee & Thompson’s Film & TV Group has worked on seven productions where the EKOME rebate was accessed by producers. With more and more producers and financiers looking to take advantage of the Greek rebate, Film & TV Associate Sarah Cundall sat down with Thanos Leontaris, Partner at Ratio Legal Services (based in Thessaloniki in Greece) and L&T’s co-counsel on some of these productions, to talk through the mechanics and accessibility of EKOME.

What exactly is the EKOME rebate?       

The EKOME Cash rebate programme provides cash money for film productions that have been either in part or totally produced in Greece. The finance provided is a blend of EU funds (falling under relevant State Aid regulation) and national funds.

Is the EKOME rebate payable on all types of Film/TV productions?

It extends to short and feature films, documentaries, television series, animated films, but NOT concerts, recorded performances, sports events and performances, reality shows, recorded events, commercials, infotainment television programmes.

Does it apply to other audio-visual productions like short films and video games?          

Digital games are currently being re-evaluated to be included in the EKOME.

What makes a production eligible for the EKOME rebate?           

A production must have a certain level of Greek spend in order to be eligible for the EKOME.

For feature films, the minimum is EUR100,000 of Greek spend and for short films, the minimum is EUR 60,000 of Greek spend.

For television dramas, it gets a little more complicated, the minimum Greek spend is EUR 25,000 per episode unless there are more than 70 episodes produced, in which case the minimum is dropped to EUR15,000 per episode and if the drama is only partly shot in Greece, then the total spend must be at least EUR100,000 per episode.

Like television dramas, there is also a higher threshold for documentaries and animations only partly shot or made in Greece.

For documentaries or animations completely shot or made in Greece, the minimum level of Greek spend is EUR20,000 but this threshold increases to EUR60,000 for only part-Greek productions.

What counts as eligible Greek spend? Are any expenses for non- Greek cast or crew eligible?                

Greek Spend:

• Talent fees e.g. writers, director, underlying rights holders, two actor leads (calculated by total fee) can only be up to 35% of the total eligible budget but the rest of cast and crew is without a cap.

Foreign Spend:

You can claim for a non-Greek Director and 2 cast members if the total eligible budget provided that:

• The eligible budget (spent in Greece) is above EUR 8,000,000
• The total fees to be rebated amount to up to 20% of the eligible budget.
• The entities or persons issuing the foreign invoices are not domiciled in non-co-operative tax countries (a list of these countries is updated every year by the Greek tax authorities and includes countries such as Sint Maarten and Vanuatu).
• The eligible foreign spend has to match in euros the eligible Greek spend meaning that each foreign expense euro has to at least equal a Greek spend euro.

It is also worth noting that VAT is not eligible when it can otherwise be recouped. Fuel, lodging and food etc. are also not eligible.

Is there a maximum pay out per project?            

Yes, EUR12,000,000.

With the UK Film Tax credit, there are certain cultural requirements that have to be met. Are there similar requirements with the EKOME?           

Yes, similar to the UK, there’s a Cultural Test that must be met by a production scoring at least 20 points out of a total of 50.

Points are awarded for:

• a script based in Greece;
• a theme concerning Greek or European history with historical, religious, social, artistic or cultural content;
• a script adapted from or based on a Greek or European literary work or a work of another form (such as theatre, musical, opera, ballet);
• a plot which makes use of places that highlight the diversity of the natural landscape, architecture and historical wealth of Greece, or the border in mainland and insular Greece, and that reflect the European and Mediterranean identity;
• Greek or European characters;
• original dialogue or narration in the Greek language (or one of the Greek dialects or in a language of the European Economic Area (EEA)
• a theme that promotes artistic creation and the application of new technologies, culture, humanitarian values, social and racial integration and/or the dissemination of the arts and sciences;
• participation of Greek citizens or citizens from the countries of the European Economic Area (EEA) in the main specialties: director, screenwriter, producer, lead actor (one), lead actor (one), director of photography, sound engineer (production sound mixer), editor, production designer, set designer or costume designer, music composer;
• participation of Greek citizens or citizens from the countries of the European Economic Area (EEA) in all other specialties;
• outdoor or in studio scenes shot in natural locations and studios in Greece;
• final editing in Greece;
• image editing in Greece;
• sound editing in Greece; and/or
• music recording in Greece.

So, an applicant can access the EKOME with post-production?  

Yes, as long as the project passes the cultural test and minimum budget/spend requirements described above.

Is there a requirement for the amount of work undertaken in Greece?

Provided that the project passes the Cultural Test with the minimum amount of points and the budget/spend requirements meet the levels described above, the project doesn’t have a minimum work requirement in order to qualify for EKOME provided that the spend is in Greece and performed in Greece.

Are there any other tests that need to be met in order to qualify for EKOME, for example a Greek co-producer having a share of copyright in the project?  

Copyright does not need to be owned or shared by the applicant, but the applicant does need to have a presence in Greece in the form of being a corporate entity based in Greece or a foreign corporate entity having a branch in Greece. For foreign producers wishing to take advantage of the EKOME, it can enter into a production services agreement with an existing Greek Production Services Company or a Co-Producer, who would then be eligible to apply.

International co-productions can also be eligible for state or EU funding.

If the Applicant can establish a presence in Greece as you describe above, how and when does the applicant then apply? 

Applicants can apply online via the State Aid Information System. It’s an online form which requires the uploading of various documents, for example budget, finance plan, co-production agreement (or production services agreement), corporate documents (certificates, balance sheets), script (translated into Greek if not originally Greek), declaration containing attached persons. There is also a small fee payable tied to the eligible budget.

Spend is only eligible after the application has been filed and this needs to be done at least 10 days before the beginning of any Greek shooting element.

It can take a while for the application to be approved (sometimes a couple of months) but the spend is eligible after filing but EKOME does provide an interim letter of intent (LoI).

And when is the EKOME payable?

The rebate is payable once production of the relevant project has been completed and the costs of the investment plan have been audited. EKOME cannot be paid in instalments, only in one payment.

Does the EKOME need to be paid to the producer or can it be directed to an account in the name of another party, for example the party cashflowing the EKOME?

If so, does it have to be a Greek-held account?    It can be directed to any Euro account in the world provided that that account has been declared to EKOME as the beneficiary of the rebate which can be the producer, applicant or co-producer.

However, a Greek (or other IBAN registered) bank account is usually recommended.

What are the typical ways you’re seeing financiers of the EKOME rebate protect themselves?

Taking pledges over the cash rebate account, shares/stock of the beneficiary company or pledges/security over the production’s IP.

We would also recommend that financiers take charge over VAT returns.  VAT is a significant amount in Greece as most services/products incur 24% VAT. Financiers and producers need to plan how to cashflow productions in Greece as the spend becomes eligible for the Greek Cash Rebate only if an invoice is fully paid up with the VAT.

The structure is key – the rebate is secure when the financier can control the rebate process and the monitoring of the spend. Essentially, making sure that the company applying for the rebate and/or its beneficiary can totally control, without relying on a local PSC, the application for the EKOME rebate and VAT returns. A financier could do this by setting up a Greek subsidiary that will file for the rebate on behalf of the foreign producers.

Audits are now also being conducted by auditors appointed by EKOME. EKOME requires that the entity has a scanned record of all invoices and payments as a backup because it no longer conducts its own audit and cash rebate pay-outs rely on the external auditor similar to the UK system.

Do you think EKOME will be around for a while?             

It has secured funding until at least 2027 and we expect it to be further extended due to its ongoing success. The new EU financing scheme will provide new opportunities for bigger projects.

Find out more

If you’re interested in learning more about the Greek EKOME Rebate, please reach out to Thanos Leontaris at leontaris@ratio-law.com or Sarah Cundall at sarahcundall@leeandthompson.com.