Camille Deleau is account manager for Fortis Mediacom Finance, the new branch of Fortis. She advises on European film financing, co-productions and tax incentives. She presented several tax Shelters and tax Credit Schemes in Europe:

SOFICAS IN FRANCE
Created in 1985. Tax system: tax deduction selected scheme, based on content

How does it work?
Individuals and Companies invest in Soficas to access tax Deduction. Soficas then select film and TV projects for investment and take a negotiated recoupment position. No completion bonds are needed.
Who raises the money?
Soficas raise their own money.
What’s the catch?
Soficas were created to invest in independent productions but companies such as EuropaCorp and UGC have their own companies…
How much was raised in 2006?
A total of 32 .8 M € was raised through soficas.
What about TV?
TV series are eligible.

THE “CREDIT D’IMPÔT” IN FRANCE
Created in 2004. Tax system: tax credit

Based on spend or content?
Spends occurred in France. Any European citizen can now access certain positions as interpreter, author and artistic or production staff.
How does it work?
> Producers have the choice between a cash rebate AND a rebate against corporation tax for up to 20% of below-the-line costs
> eligible costs taken in account must be <80% of the total budget (or the French part)
> the credit will always be <1 M €, <1150 € /min for TV and Docs ; <1200 € /min for animation
> the tax credit for one work cannot make the total amount of public money granted to that film represent more than 50% of the budget (60% for difficult or low-budget films, defined by decree). In 2006, 119 films qualified for the «credit d’impôt».
What productions are eligible?
Film & TV > 45 min, costing > 5000 € /min
animation > 24 min, costing >3000 €/min
shot in France, French speaking
Who raises the money?
The producer handles the crédit d’impôt.
What’s the catch?
To get the crédit d’impôt, a film must qualify for 38 out of 40 points on a cultural test. Weight given to the nationality of the crew, shooting location and post production.
What about TV?
TV projects are eligible.

CIAV IN LUXEMBOURG... AND THE CIAV+ IN 2007
Created in 1985. Tax system: tax credit. No direct link with investors.

Based on spend or content?
Spend… and now content with a specific grid for animation.
Automatic scheme and has to be kept that way.
How does it work?
> CIAV are delivered by the state to the Producer to get up to 30% of their benefit tax exemption
> the help provided can reach 1/4 (between 12,5% and 25% usually) of the budget spent in Luxembourg
> the rate depends on the criteria of eligibility reached by the film (min 50/100 points, no min for animation) in a specific grid . this will define a rate on the whole budget
> the financial support is paid at the end of the production after a control of the FILM FUND (ex Fonspa)
> No need for a completion guarantee.
What productions are eligible?
> Completed production
> Mainly shot in Luxembourg
> With ROI perspectives
> rights partially owned by the Co-producer from Luxembourg.
Who raises the money?
an audiovisual Company registered with the FILM FUND
What’s the catch?
No catch so far… and the risk has been lowered.
What about TV?
Suitable for TV series too.

SECTION 481 IN IRELAND
Created in 1993. Tax system: tax allowance automatic scheme

Based on spend or content?
The film does not need to be Irish, the spend matters.
How does it work?
> Projects can benefit up to 20% (for an indigenous film) 18% (more often) of their qualifying expenditure (approx 10%-12% of the budget) as a tax credit
> 82% of the budget must be in place
> there is a ceiling of 35 M € on qualifying expenditure per project
> section 481 benefit is made available to the production on the first day of principal photography
> Qualifying expenditure means the cost of EU cast and crew working in Ireland, and goods and services purchased in Ireland.
Who raises the money?
A foreign producer must team up with an Irish-based co-producer. The Irish co-producer applies with the Irish revenue Commissioner for a section 481 certificate. The issue of this certificate allows the section 481 finance to be raised by the Irish co-producers with financial institutions and advisors.
What’s the catch?
Financial and middlemen fees are so high, it’s not worth using section 481 for <1 M € budgets. At the time it was created, the country was poor, so you could not invest more than 31.700 € (need for a lot of investors) Need for a completion Bond.
What about TV?
Yes. 25 productions / year include TV and many animation projects.

THE BELGIAN TAX SHELTER
Created in 2005. Tax system: tax allowance. Automatic and in direct link with the investors.

How does it work?
> Investors can access a tax exemption worth 150% of the amount they invest in Belgian audiovisual projects
> Investors won’t get more than 50% of the benefit rebate (and less than 750,000 €)
> Investors can make a maximum of 40% of their investment in the form of a loan, the rest being used for rights acquisitions (equity)
> Projects must have a Belgian production company involved
> the tax investment must not exceed 50% of the total budget
> the producer must spend in Belgium at least 150% of the equity
> the Belgian spend must occur in the 18 following months.
What are eligible productions?
European theatrical films, animation series and TV docs fulfilling the Television without Frontiers Directive.
Who raises the money?
Belgian producers.
What’s the catch?
The Belgian tax shelter was created to stimulate local production and encourage investment from companies that would not normally support the film business. In the tax shelter law, it is clear that there is meant to be a direct relationship between the investor and the production company. The danger is the weight of the middle man growing and them using the tax shelter as a financial tool. Huge profit participation. Hard to combine with other helps.
What about TV?
TV projects are eligible.

TAX ALLOWANCE IN HUNGARY
Created in 2004. Tax system: tax allowance automatic scheme

About spend or content?
Spend. Financial costs are eligible.
How does it work?
> It is a cash contribution of up to 20% of the Hungarian spend of the budget
> suitable for Hungarian and Non-Hungarian co-productions, as long as shot in Hungary
> a non-Hungarian producer enters a service Or co-production agreement with local producer which is registered with the National Film Office. The local producer must register the production with the NFO and certify the production costs paid in Hungary
> Once the NFO delivers 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.
Since 2004, more then 200 projects were helped It is a good system for co productions and small budgets.
Who raises the money?
Specialized Film group or individual companies with sufficient large corporate tax liability.
What’s the catch?
The Hungarian tax credit can only be used for production-related costs incurred and paid within Hungary. Above-the-line costs may only be covered if the individual pays personal income tax in Hungary. A completion bond is needed in case of a co-production. Better for smaller budgets, less intermediaries.
What about TV?
TV programmes are eligible.

THE NEW GERMAN SPEND SYSTEM
Created in 2007. Tax system: More than a tax incentive it is a discount system. No private investors involved.

Based on spend or content?
German spend. NO financial and legal fees. Actors: only up to 15% of the total. NO development costs.
How does it work?
> 20% of eligible German costs for EU co-production Or German film (cultural test)
> 75% of the financing cost has to be in place
> You have to spend 25% of your budget in Germany (20% for budgets > 20M €)
> You have three months to start production after reception of the certificate
> the budget must be a minimum of 1M € (200,000 € for documentaries) CaP: 4M € (exception: 9M €)
> It can be paid in three equal parts during production but that case will need a completion bond.
Where does the money come from?
This is a new Government Fund, the DFFF. 80 M € / year for three years were allocated.
What’s the catch?
The need for a German distributor (with a history of 3 films) for at least 30 prints during a week. It is hard for co-productions to spend the 25% in Germany.
What about TV?
NO TV projects are eligible.

THE UK TAX CREDIT
Tax system: tax relief replacing the Sale & Lease back since January 1st. Automatic scheme

Based on spend or content?
On spend in the UK, no matter the nationality. UK spend does not include Development spend and legal and financial fees.
How does it work?
> It’s a tax credit payable directly to producers
> For films up to 20M £ the rate will be a net 20% (you can claim for 100% of your UK expenditure by the UK co producer)
> For bigger budgets, the rate will be a net 16% (you can claim for 80% of your UK expenditure by the UK co-producer)
> Minimum expenditure is 25% (including non UK co-producer spend) to have access to the credit
> the production company responsible for the film needs to be within the UK corporation tax net
> Completion bonds are always needed in the UK to attract investors.
What are the productions eligible?
> Films must have a British distributor
> Films must have passed the British Cultural test or be a British co-production
> reach a minimum of 25% of UK expenditures.
What’s the catch?
Producers have expressed reservations about the new cultural test films needed to pass before they can access the tax relief. The producer gets the money at the end of each financial year!
What about TV?
Not available for TV projects.

Cartoon Master Potsdam, Germany, November 2007