Iceland's wild scenery, tax breaks lure Hollywood

REYKJAVIK, Iceland (AP) -- It has doubled as an alien planet, a Himalayan peak and even the snow-filled fantasy world of the "Game of Thrones." Still recovering from financial collapse, Iceland can perhaps be forgiven for seeking alternate identities.

And Hollywood is providing the remote North Atlantic island much needed revenue and jobs — as well as a touch of glamour — as it struggles to emerge from its nationwide banking and currency debacle. The country's unique environment, along with generous tax incentives, continues to attract some of the biggest Hollywood filmmakers and television producers.

"The main factor is the incredible landscape that we have," said Einar Sveinn Thordarson, the director of marketing for Pegasus, which provides production services for HBO's "Game of Thrones"; the hit series has filmed in Iceland three times. "It's very unique, and that's what inspires people the most."

This summer, about 300 crewmembers spent two weeks at Iceland's Thingvellir National Park, shooting for the upcoming fourth season.

Game of Thrones producer Chris Newman told Icelandic news website Visir this summer that they were creating the Westeros world in the drama — and that Iceland fits the vision for the imaginary continent.

"I've been filming here and working here for 25 years working on and off and I know, having driven around so much, that there's so much landscape here to make the show just seem enormous," said Newman.

Producers have come to treasure Iceland for its strange and magnificent appearance: otherworldly black lava fields, active volcanos and gushing geysers.

The variety of locations and landscapes is a huge selling point not only for television shows, but also big Hollywood films, said Leifur Dagfinnsson, chairman and founding partner of Truenorth, which has worked on films including "The Fifth Estate" — a film about WikiLeaks and its founder, Julian Assange — and "The Secret Life of Walter Mitty."

Director Ridley Scott chose Iceland as his alien planet for the 2012 sci-fi film "Prometheus," choosing to shoot in Iceland's northern highlands. Iceland also hosted a crew of 1,000 people for Clint Eastwood's 2006 war film "Flags of Our Fathers."

In addition to the wild landscapes, there are financial reasons to shoot in Iceland. Tax incentives lure filmmakers, as the government operates a generous reimbursement program.

Visiting film productions could get reimbursed up to 20 percent of their production costs while filming on Icelandic soil, a substantial benefit on films costing tens or hundreds of millions of dollars.

To qualify for the rebate, filmmakers must establish a company in Iceland, or create an Icelandic branch of an existing company. The filmmakers then send details about the film to Iceland's Ministry of Industry, along with an estimate of production costs. Eligible production costs do not include wages for employees who pay tax in another country.

"We wouldn't stand a chance without this rebate," said Dagfinnsson.

While Iceland's environment is beautiful, it's very unpredictable. Weather patterns change rapidly, and foreign production crews have to be ready for anything.

During filming for Ben Stiller's "The Secret Life of Walter Mitty," actors and crewmembers were in a battle against fierce winds.

"We were filming Walter Mitty August into September," said Dagfinnsson. "We had strong winds coming down in September when cold glacier air meets warmer air. We had Sean Penn's trailer capsize in the wind. We had to dig through (his possessions) and collect his weights so he could train in his hotel. It was that kind of weather where we were held inside the hotel for two days."