As we informed you in our latest newsletter, registrations for new film productions in Hungary had been suspended due to unexpectedly high volume of new registrations lodged in late 2024 and processed in the first quarter of 2025. Our newsletter below summarizes the latest developments in this regard.
The Hungarian Parliament has recently voted on the amendments to the Film Law. Among other changes, this was primarily important to authorize the National Film Office (NFO) to request data from the productions and make cash-flow projections when the production spend would actually be made. This was necessary for the NFO and for the government to better understand when and in what amount the tax rebate would be sought in the future years.
As a next step, a new government decree will also be enacted to define the procedures of the National Film Office (NFO) how to allocate the spendings between 2025 and future years. Based on the draft decree, the annual cap of HUF 407 billion would only be relevant for spend to be made in 2025; future year spendings would be taken into account in future years cap, if any. As a result, probably a very significant portion of the 2025 cap would become available again once the government decree is officially published – that is expected to happen in the next coming weeks.
What happens if the cap is reached again?
Considering the size and the actual capacity of the Hungarian film industry in overall, the amount of cap is very generous, as it exceeds the annual output that the Hungarian film industry has ever achieved. Nevertheless, it cannot be excluded that due to continuous expansion and development of the industry the cap would be exhausted again. In this case, as well as until the new decree is officially published, the NFO continues to accept new registrations, but immediately suspends the evaluation process until the new government decree is issued, or until 2026 the latest, when the 2026 cap could already be accessed. (The cap for 2026 should be determined by 30 September 2025.)
This means that new film registrations are accepted and processed by NFO again although resolution on the registration will not be issued until the new government decree is in force. As the registration process can be suspended for 6 month the maximum, any registration submitted after 1 July 2025 would technically be restarted in 2026 the latest. The NFO is going to process the registrations on a first come first serve basis, so the earlier the registration request is lodged, the earlier the NFO can issue the resolution to the production.
We, at Andersen, continue to closely monitor the status of the government decree and will report on new developments as soon as they are known.