27/09/2013 - A pooling mechanism for part of the profits of cinema and audiovisual operators, inciting reinvestment and favouring creation

Surfing on the good news of the decrease of VAT to 5% for cinema admission tickets from January 1, the government unveiled the 2014 budget allocated to the funding of cinematographic, audiovisual and multimedia industries, which is of 667.8 M€ (including 44,2 % specifically devoted to cinema).

The distribution, handled by the CNC, will hand out 406.5 M€ for automatic support (86.2 M€ for cinema producers; 30.7 M€ for distributors; 65.6 M€ for operators 6.5 M€ for video editors), 254.7 M€ for selective funding (including amongst others the advance on receipts) and 6.4 M€ for the Digital Plan dedicated to French Film Archives.

These credits are covered by the revenues of three taxes affected directly (without going through the State’s budget) to the CNC: 134.2 M€ from the price of cinema tickets (10.72 % of the admission price), 537.7 M€ from the television services and 28 M€ from video and VOD. As underlined by the government, this “virtuous and solidarity-based pooling mechanism of a part of the sector’s profits, inciting reinvestment and favouring original creation” has proven its efficiency. 

It is worth noting that tax schemes complete this panorama with the Sofica (sociétés pour le financement de l'industrie cinématographique et audiovisuelle) which enables individuals to invest in production (115 films – including 53 first or second films - and 27 audiovisual works benefitted from these schemes in 2012) and the cinema tax credits (estimated to be worth 70.2 M€ in 2014), audiovisual tax credits (61.5 M€), video games tax credits (5 M€) and international tax credits (12 M€ in fiscal spending in 2014 to attract foreign TV and cinema productions on the French territory, which will generate superior economic benefits).  

It is finally worth mentioning that the government, as part of the improvement of public finances, will take 90 M€ in 2014 from the CNC’s working capital, from which 20 M€ will nevertheless be given to the IFCIC (Institute for the funding of cinema and cultural industries) in order to strengthen its participation in favour of the digital transition.  

(Translated from French)