A major new strategic analysis has called for a fundamental overhaul of Poland's audiovisual production incentive, warning that the current system's budget limitations are causing it to lose significant international investment and stifling the growth of its domestic industry.

The report, A Strategic Analysis of Poland’s Audiovisual Incentive, was commissioned by the Producers Guild of Poland (PGP) with support from key industry partners and co-funded by the Polish Film Institute (PFI). Compiled by the renowned international consultancy Olsberg SPI (SPI), the study provides a stark assessment of the country's 30% cash rebate system and offers a roadmap for its future.

Launched in 2019, the Polish cash rebate has been undeniably successful, supporting over PLN2.36 billion in qualifying production expenditure. However, its very success has become its biggest weakness. The report reveals that demand now massively outstrips supply, with the annual budget allocation being exhausted within minutes of opening in both 2024 and 2025. This has created a "de facto lottery" for producers, undermining the stability and predictability that international investors and local filmmakers desperately need.

"The fundamentals of the Polish incentive remain competitive, but its limited budget capacity is the central constraint," the report states. It calculates that between 2019 and 2025, applications for funding representing at least PLN1.5 billion in potential production expenditure were rejected or placed on a reserve list, representing a huge missed opportunity for the Polish economy.

Beyond the budget crunch, the analysis highlights several critical structural issues:

Cashflow Crisis for Local Producers: Polish producers face a significant disadvantage as the rebate is only paid after production ends. In the absence of specialist financing, they are forced to take out high-interest commercial loans (sometimes exceeding 15%), which severely erodes the incentive's net value.

High Entry Barriers: At PLN4 million, Poland has the highest minimum expenditure threshold for local feature films among its regional competitors, including Lithuania (PLN180.000) and Slovakia (PLN425.000), effectively locking out smaller, culturally significant projects.

Cumbersome Processes: The application process is resource-intensive, requiring paper copies of documents and full Polish translations, adding cost and legal risk for international productions.

In response, SPI has proposed a comprehensive package of five key recommendations designed to transform the incentive into a stable, high-capacity economic engine:

Remove or Significantly Increase the Annual Cap: This is the cornerstone of the reform, aimed at providing the stability needed to attract major international partners and allow the domestic industry to scale.

Introduce a 40% Rate for Lower-Budget Polish Films: Mirroring recent moves in the UK and Ireland, this targeted uplift for productions with qualifying expenditure up to PLN12.5 million would provide a crucial stimulus for local cultural investment.

Harmonize Minimum Expenditure Thresholds: The report recommends aligning the thresholds for local and international productions to create a level playing field based on project scale, not origin.

Introduce an Advance Payment Option: To solve the crippling cashflow issue, the report suggests allowing Polish productions to access 75% of the approved incentive upfront, upon proof of financing.

Streamline the Application Process: Key changes include moving to a fully digital system and accepting key documents in English to reduce friction and costs.

The report's economic modelling shows that implementing these recommendations would yield a transformative return on investment. It forecasts that in the five years following reform, incentivised production expenditure would more than triple, generating an estimated PLN4.74 billion in Gross Value Added (GVA) for the Polish economy and supporting an average of 3,880 full-time equivalent (FTE) jobs annually. Crucially, the analysis projects that for every złoty invested by the government in the enhanced incentive, the Polish economy would receive PLN3.49 in return.

The study also presents Poland with options for its future incentive model, from reforming the existing cash rebate to transitioning to a more stable tax-based system, such as a refundable tax credit, or adopting a dual-model approach. It cites the long-term stability of the Hungarian tax shelter model and the uncapped, automated success of the UK's system as key examples of what a well-funded, predictable incentive can achieve.

"The incentive is an economic development measure first and foremost," the report emphasizes. "What strengthens Polish domestic producers also strengthens Poland’s offer to international partners."

With the Danish Film Institute recently launching its own incentive and other European nations continuously enhancing their offers, the pressure is on. For Poland to maintain—let alone grow—its position as a competitive production hub, the report makes it clear that the time for incremental change is over, and a bold, strategic overhaul is urgently required.