This is an official translation. The original Icelandic text published in the Law Gazette is the authoritative text.

Capital Movements, Imports and Foreign Investments - Regulation No 131/2001 on Temporary Reimbursements in Respect of Film Making in Iceland. -

(Translation from Icelandic)

Article 1
Up to 12% of the production costs incurred in the production of films and television programmes in Iceland, or, as appropriate, in other EEA member states, may be reimbursed by the State Treasury (cf. Art. 5 of this Regulation and Art. 2 and 5 of the Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with subsequent amendments).

Article 2
Conditions for reimbursement.
In assessing whether a proportion of the production costs of a motion picture or a television programme shall be reimbursed, the following conditions shall be fulfilled:
a. the production shall be suited for promoting Icelandic culture and the history and nature of Iceland;
b. the production shall be suited for enhancing the experience, knowledge and artistic ambition of those involved in the production;
c. a specific company shall be established in Iceland for the production; an Icelandic branch or agency of a company registered in another EEA member state shall be considered a specific company;
d. information on the principal parties involved in the film or television programme shall be submitted;
e. information on domestic parties and their share in the production of the film or television programme shall be submitted;
f. an itemised estimate of the production costs and sources of funding shall be submitted, together with confirmation by the funding parties and a declaration by the producer to the effect that the production conforms with the aims of the Act No. 43/1999;
g. information on the content of the proposed film or television programme shall be submitted, including a manuscript, synopsis and information about filming locations;
h. a production plan shall be available (i.e. filming, post-production and marketing plan), providing for completion of the production within three years of receipt of the application for reimbursement;
i. a statement shall be submitted to the effect that the material to be produced is intended for general distribution to cinemas or television stations,
j. the content of the film or television programme shall not violate the Film Censorship and Prohibition of Violent Films Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.
In the event of a change in the estimated production costs (cf. paragraph 1, item f) after production begins, a new cost estimate shall be submitted to the Ministry of Industry.
Notwithstanding the provisions of paragraph 1, item c, an applicant for reimbursement may postpone the formal establishment of a specific company for the production of a film in Iceland, or the registration of a specific branch or agency, as appropriate, until the recommendations of the committee (cf. Art. 4) in favour of reimbursement have been received. If the committee's recommendations are positive, the applicant shall then have three months in which to complete the formal establishment of the company or the registration of the branch or agency. Failure on the part of the applicant to complete these formal requirements by the end of this period shall be interpreted as a withdrawal of the application.
Material related to advertisements and news, short films, recordings of sports events and entertainment items, and also the production of material that is primarily intended for showing in own distribution systems, shall not be regarded as material pursuant to item i of paragraph 1.
    Article 3.
    Applications for reimbursement shall be submitted to the Ministry of Industry before production in Iceland commences. Applications shall conform to instructions given by the Ministry, available on its web side, concerning their form, accompanied by documents demonstrating that the conditions of Art. 2 of this Regulation are met.

    Article 4
    Processing of applications.
    A committee appointed in accordance with Art. 4 of the Act No. 43/1999 shall examine applications. In processing applications, the committee shall have as its prime consideration whether the film or television programme promotes Icelandic culture, and as applicable, containing references to Icelandic history and nature. The committee may request further information if it considers this necessary.
    If the committee considers that an application qualifies for reimbursement, it shall submit to the Minister of Industry a recommendation that a conditional promise be given for reimbursement. Such conditional promise issued by the Minister shall contain a reference to the authorisation under Art. 8 for a deferral of reimbursements.
    In processing applications, the committee may call for an expert opinion regarding the assumed artistic value of the relevant production.
    Article 5
    Production costs.
    Production costs are defined as all costs incurred in Iceland that are deductible from the revenues of enterprises pursuant to the provisions of the Act on Income and Net Wealth Tax or, as applicable, costs incurred in other EEA member states (cf. paragraph 2 of Art. 2 of the Act No. 43/1999).
    In order to qualify as reimbursable production cost, the portion of the production costs that is incurred in another EEA member state shall be recorded in accordance with the accountancy legislation of the state in which it is incurred, and that portion of the production cost shall be specifically confirmed by a certified public accountant of that same state.
    It is furthermore a condition that the payment of production costs is made to a party who is taxable pursuant to Art. 1 or 2 of the Act on Income and Net Wealth Tax, No. 75/1981, or under comparable statutory provisions in another EEA member state, or to an official entity.
    Article 6
    Decisions on reimbursement.
    When production of the film or television programme is completed, the applicant shall notify the Ministry of Industry in writing with a request for reimbursement, together with a balance sheet and statement of operations. An itemised cost settlement showing specifically in which country the costs were incurred, shall also be submitted. The cost settlement shall be confirmed and signed by a certified public accountant.
    The committee provided for in Art. 4 of the Act No. 43/1999 shall examine all documents submitted, and may request further documentation to clarify the cost settlement, e.g. the company's accounts. The committee may also request a meeting with the applicant. If the cost settlement and/or the accompanying documents are unsatisfactory, the committee shall set the applicant a time frame within which satisfactory documents are to be submitted. If the committee does not receive satisfactory documentation within the set time frame, it shall recommend to the Minister of Industry that the application for reimbursement be rejected.
    The Minister of Industry shall decide on reimbursements under this Regulation after receiving the recommendations of the committee pursuant to Art. 4 of the Act No. 43/1999.
    Article 7.
    Processing of reimbursement.
    The certified public accountant of the company, branch or agency (cf. item c of paragraph 1 of Article 2 of this Regulation) shall, before reimbursement, confirm that the production which forms the basis for the calculation of the reimbursement, is completed and that the cost settlement is final, subject to receipt of said reimbursement according to this Regulation. The reimbursed amount shall be entered as income in the accounts of the company, branch or agency and not as a reduction of debited expenses. Within 6 months from the receipt of reimbursement, the company shall have been wound up or the branch or agency closed. Having received the reimbursement from the State Treasury and after completion of the winding-up of the company or closure of the branch or agency, as the case may be, the recipient shall dispatch to the Ministry of Industry the final balance sheet accompanied by a confirmation of the winding-up or closure.
    Changes made to the balance sheet or confirmed cost settlement after reimbursement and until dispatch of the final balance sheet to the Ministry, may result in the recipient being requested to reimburse the reimbursement, unless the Committee pursuant to Art. 3 of the Act No. 43/1999 approves the reasons for such changes.

    Article 8.
    Deferral of reimbursement.
    Amounts reimbursed under this Regulation shall be subject to allocations made by the Althing in the State Budget at any given time. The Minister of Industry may defer such reimbursements (cf. Art. 7 of this Regulation) exceeding the allocation in the State Budget at any given time. In the event of the reimbursements authorised during a budget year exceeding the budget allocation, the Minister may defer reimbursement, either entirely or partially, until the following budget year.
    Article 9
    Entry into Force.
    This Regulation (as amended by Regulation No. 437/2001 of 13 June 2001) is issued in accordance with Art. 7 and 8 of the Act No. 43/1999, with subsequent amendments, and takes immediate effect. At the same time, Regulation No. 377/1999 stands repealed.
    In the absence of provisions in this Regulation, with subsequent amendments, or in the Act No. 43/1999, with subsequent amendments, the legislation on public limited companies and private limited companies shall apply.
    Ministry of Industry, 9 February 2001.