Icelandic Film Centre (Kvikmyndamiðstöð Íslands)

Overview

The Icelandic Film Centre is the Icelandic government agency responsible for supporting the development, production, promotion, and preservation of Icelandic cinema. Founded in 1999, it administers selective production grants for Icelandic theatrical features, documentaries, and short films, and manages the Icelandic Film Production Incentive: a 25% rebate on qualifying Icelandic production expenditure, rising to 35% for productions meeting enhanced criteria. For international productions considering Iceland as a shooting location, the rebate combined with Iceland's landscape diversity creates a financially competitive production destination.

In December 2025, the Icelandic parliament renewed the reimbursement legislation, extending the program through 2028. The renewal introduced new provisions, including a 35% rebate rate for children's, youth, and animated content without the usual cultural test requirements. The full details are available at Film in Iceland's incentives page.

Only companies registered in Iceland can receive funding from the Icelandic Film Centre. International productions must work through an Icelandic production company to access the rebate. Applications for reimbursement must be submitted to the Committee on Reimbursement for Film Production before production begins in Iceland.

The 25% Base Rebate

All productions for feature films, TV shows, and documentaries in Iceland are eligible for a 25% reimbursement of production costs, regardless of the production's total cost. There is no minimum spend threshold for the 25% base rate. Qualifying expenditures include crew wages (taxed in Iceland), equipment rental, accommodation, catering, and post-production services performed in Iceland.

If more than 80% of the total production cost is incurred in Iceland, the reimbursement can be based on costs incurred across the entire European Economic Area (EEA), not just within Iceland. This provision, formalized in the December 2025 legislative amendment, also allows wages and contractor payments to entities taxed within the EEA to count toward the rebate base.

The 35% Enhanced Rebate

Productions can raise their rebate from 25% to 35% by meeting all of the following criteria:

• Production costs incurred in Iceland must total at least ISK 350 million (approximately $2.5 million USD)
• A minimum of 30 working days in Iceland, of which at least 10 must be shooting days (the remainder can be post-production working days)
• A minimum of 50 staff working directly on the project, amounting to at least 50 working days
• Salary and payments to employees and contractors must be taxed in Iceland

As of December 2025, children's, youth, and animated content is eligible for the 35% rebate rate without needing to meet the standard three-point cultural criteria required for other productions. This change was introduced to strengthen the position of such content given specific challenges in financing and distribution.

Grant Programs

The Icelandic Film Centre administers grants across five categories. Applications can be submitted at any time throughout the year, but only companies registered in Iceland are eligible:

• Screenwriting grants: For developing scripts for feature films, documentaries, and short films
• Development grants: For project development prior to production commitment
• Production grants: For Icelandic theatrical features, documentaries, and short films entering principal photography
• Post-production grants: For projects in the final stages of completion
• Promotion grants: For marketing and distribution of completed Icelandic films

Grant amounts are not publicly fixed at standardized rates. The Centre evaluates applications based on project quality, budget, and available funds. Public grants received from the Icelandic Film Centre or other public entities are deducted from the production cost base when calculating the reimbursement rebate, and the combined amount of public grants plus reimbursement cannot exceed 85% of total production costs.

Nordic and European Co-Production

Iceland participates in several international co-production frameworks:

• Nordisk Film & TV Fond: Pan-Nordic co-production financing alongside Denmark, Sweden, Norway, and Finland. Icelandic-Danish co-productions are particularly common given historical cultural and linguistic connections.
• Eurimages: Iceland is a member of the Council of Europe's film fund, allowing Icelandic producers to apply for production grants for European co-productions.
• EU MEDIA Program: Through Iceland's EEA membership, Icelandic productions can access MEDIA funding for development, distribution, promotion, and professional training.

Practical Considerations for International Productions

Large rebate deferrals: Under the December 2025 amendments, when the expected or final reimbursement reaches ISK 300 million or more (approximately $2.1 million USD), disbursement can be deferred for at least 18 months from the date the pledge of reimbursement is issued. This applies to existing pledges as well as new ones. Producers should factor this cash-flow delay into their financing plans.

Production timeline requirement: Principal production must begin within one year of the pledge of reimbursement date. If production has not started within that window and no justified extension request has been submitted, the pledge automatically becomes void. The applicant must notify the Committee when principal production begins.

Application process: Applications are submitted online to the Icelandic Film Centre. The Committee on Reimbursement for Film Production reviews applications and, if conditions are met, issues a pledge of reimbursement. After production completion and financial settlement, the applicant submits a disbursement application with itemized costs. If the reimbursement exceeds ISK 20 million, the cost settlement must be audited.

Icelandic Cinema and Domestic Market

Iceland's domestic film industry is small by global standards. With a total population of approximately 375,000, the domestic market cannot sustain commercial feature production without public subsidy. The Film Centre's grants are the financial foundation for Icelandic theatrical film careers. Icelandic directors including Dagur Kari (Noi the Albino), Hlynur Palmason (Godland), and Valdimar Johannsson (Lamb) have achieved international festival recognition, and Icelandic productions regularly co-produce with Danish, Swedish, and other Nordic partners.

Major international productions that have shot in Iceland include Game of Thrones, Prometheus, Interstellar, The Secret Life of Walter Mitty, Thor: The Dark World, and Rogue One: A Star Wars Story. Iceland's volcanoes, glaciers, geothermal fields, black sand beaches, and the northern lights provide landscapes that double for otherworldly, arctic, or epic natural settings.

What Filmmakers Should Know

For international producers: The 25% base rebate has no minimum spend, making Iceland viable even for smaller productions. The 35% enhanced rebate requires ISK 350 million in Icelandic costs and 30 working days with 10 shooting days. Budget for the potential 18-month deferral on large rebates. Work through an Icelandic production service company to handle the application and ensure costs are properly structured for qualification. Visit Film in Iceland for production guidance and location scouting support.

For Icelandic filmmakers: Film Centre grants are the primary financing source for domestic theatrical features. Apply across multiple categories (screenwriting, development, production, post-production) as the project advances. Co-production with Nordic partners through Nordisk Film & TV Fond and with European partners through Eurimages can supplement Film Centre grants. Remember that public grants reduce the rebate base dollar-for-dollar.

For budgeting: The 25-35% rebate effectively reduces your Icelandic production spend by that percentage. However, Iceland is an expensive shooting location: crew rates, equipment rental, accommodation, and catering costs are high relative to other European countries. The rebate offsets but does not eliminate the cost premium. Use the Film Production Budget Calculator to model your Icelandic production costs with the rebate applied.

See Also

For the Nordic funding context, see Nordic Film Directors Association in this directory. For comparable Nordic national film institutes, see Swedish Film Institute and Danish Film Institute in this directory. For estimating production costs with incentive rebates, use the Film Production Budget Calculator.