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Industry – France

Country Focus: France

Some competitive Christmas presents for cinema from the government


- The improved national and international tax credits in favour of film production have been approved by the Parliament

Some competitive Christmas presents for cinema from the government

Passed yesterday by the Parliament, the draft Amending Finance Law 2014 confirmed some very good news for the French film industry: from 1 January 2016, several improvements to national and international film tax credits will come into force.

The national film tax credit prime rate of 30% (of eligible expenditure) that, up until now, had been applicable exclusively to budgets of less than €4 million will also be of benefit to movies with an estimated budget of €4-7 million. Indeed, these “mid-level” feature films, which often include the crème de la crème of French arthouse cinema, have been particularly badly affected by the fall in investment.

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This same national film tax credit (for which the standard rate remains at 20%) will see all animated films benefit from a rate of 25%.

The competitiveness of the international film tax credit has also been improved: its rate will jump from 20% to 30%, and its ceiling will be raised from €20 million to €30 million. This mechanism, which was initially intended to attract foreign productions to France, is especially vital in order to provide a boost to the drawing power of the highly efficient French animation companies – an efficiency that has recently been demonstrated yet again by the SolidAnim studio, which was selected as a partner on the upcoming instalments of Avatar by James Cameron.

The French film industry’s professional organisations have been unanimous in welcoming these developments, which are being implemented in an environment marked by strong competition between the tax credits of different European countries, but also those of Canada. Bearing in mind the global economic impact of the film sector in France (estimated at €7.5 billion by a study conducted by BIPE) and the strained economic climate (investment in French film production fell by 22.7% over the first nine months of 2014 – read the news), the industry professionals were very pleased with this decision, which seems set to strengthen the country’s drawing power and have a positive impact on employment, the competitiveness of firms and government revenues. Indeed, according to a recent study by the CNC: “For every euro of tax credit allocated since 2004, €12.20 of expenditure is made in the sector, and €3.30 of tax and social-security revenues are collected by the state.” In fact, the CNC is ending the year on a high note after having strongly supported the need to improve tax credits and taken steps to restrict access to public funding for films with excessive levels of remuneration (read the article).

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(Translated from French)

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