The Economic Impact of the UK Film Industry - BFI - British Film ...

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Economic Contribution of the UK Film Industry July 2007 Appendix A: Tax incentives provided for the film industry in a selection of other countries NAME OF SCHEME BELGIUM Belgium tax shelter. FRANCE Soficas (film investment trusts) and the credit d’impot. HUNGARY Hungarian Motion Picture Act. TYPE OF TAX SYSTEM WHAT IT SUPPORTS HOW DOES IT WORK? Tax allowance. Production. Investors can access a tax exemption worth 150% of the amount they invest in Belgian audiovisual projects. Investors can make a maximum of 40% of their investment in the form of a loan. Projects must have a Belgian production company involved, the tax investment must not exceed 50% of the total budget and Belgian spend must be at least 150% of the Belgian tax shelter capital. Tax credit (credit d’impot). Tax deduction (Soficas). Production or investment in production companies (Soficas). Production only (credit d’impot). Individuals and companies invest in Soficas to access tax deductions. Soficas then select film and TV projects for investment, and take a negotiated recoupment position. In 2006, a total of $43.8m (€32.8m) was raised through Soficas. The credit d’impot was created in 2004 in a bid to stop French productions shooting overseas. Producers either take a cash rebate or rebate against corporation tax for up to 20% of below the line costs. In 2006, 119 films qualified for the credit. Tax allowance. Production. A non-Hungarian producer enters a service agreement or coproduction agreement with a local producer which is registered with the National Film Office (NFO). The local producer must register the production with the NFO and certify production costs paid in Hungary. Once the NFO issues a tax certificate, a local financier can disburse the face value of the certificate and reduce its corporate tax to be paid at year’s end. Recent examples include features Eichmann, Mrs. Ratcliffe’s Revolution, and TV projects Robin Hood and The Company. 73
NAME OF SCHEME Economic Contribution of the UK Film Industry TYPE OF TAX SYSTEM WHAT IT SUPPORTS July 2007 HOW DOES IT WORK? IRELAND Section 481. Tax allowance. Production. Projects can derive a benefit, net of all fees, of up to 20% of their qualifying expenditure. Qualifying expenditure is based on the cost of EU cast and crew working in Ireland, and goods and services purchased in Ireland, up to a maximum of 80% of the total overall budget. There is a ceiling of $46.8m (€35m) on qualifying expenditure per project Section 481 benefit is made available to the production on the first day of principal photography. AUSTRALIA Refundable tax offset; Division 10BA of the Tax Act. NEW ZEALAND Large-budget screen production grant. Tax credit (tax offset). Tax deduction (10BA). Production only. Tax offset: The producer claims 15% (increased from 12.5% on 1 July 2007) of what is spent in Australia, providing at least $12.1m (A$15m) is spent and this represents at least 70% of the budget. The 70% condition does not apply if the spend is more than $40.3m (A$50m). 10BA: Investors receive a 100% tax concession on the full amount of their investment in the year the film is made. There is, as of 1 July 2007, a new 15% rebate on qualifying Australian Post/Digital/VFX (PDV) spend of more than A$5 million (regardless of where the project was shot) Rebate. Production only. The producer claims a 15% (increased from 12.5% on 16 July 2007) rebate for productions. The new regime removes the previous requirement for at least 70% of the production expenditure to be spent in NZ for productions between $15 and $50 million. It also allows several productions costing a minimum of $3m each to "bundle" to meet the requirement for qualifying expenditure of $30 million. And it adds an incentive to use New Zealand-based post-production digital and visual effects services with qualifying expenditure of between $3 million and $15 million. 74
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The Economic Impact of the UK Film
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Economic Contribution of the UK Fil
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