The European Commission has given the go-ahead to a French tax break that aims to encourage big-budget foreign films to shoot in the country.

The Tax Rebate for International Production, which would be open to film and TV, would offer a 20 per cent tax credit – up to $5.5m (€4m) – on money spent in France. Applications will have to pass a cultural test to prove the project has a link to French or European culture. It was passed by French parliament last December.

Frédéric Mitterrand, the new French Minister of Culture, said: “The new tax rebate aims at encouraging foreign directors and producers to come and shoot films and TV films linked to the French on our territory giving them a rebate on their French production expenditure.”

Film France, which offers support to foreign production companies and film-makers looking to shoot in the country, welcomed the decision. President Nicholas Traube said: “Film France is delighted by this further step towards the complete implementation of this mechanism we believe so much in.”

Productions including Merlin, being developed by Shine and the BBC, and Lionsgate’s Five Killers have already started shooting in  France and have been waiting for confirmation of the cultural test to submit applications for the rebate.

Applications for the credit will be handled by the state-owned Centre National de la Cinématographie (CNC), with assistance from Film France. A committee that will judge applications will meet later this summer. Films will be eligble if they have a French story, setting, character or are based on French source material, or if French companies or practitioners are involved.

Projects that receive money from CNC and are recognised as official co-production will not be able to apply for the rebate.

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