The CCA’s balance sheet: what about the Tax Shelter?
- The implications of the CCA's review rouse concerns expressed by professionals as well as institutions on the future of the Belgian Tax Shelter
The CCA’s review was held on the same day as the second session of hearings on the Tax Shelter at the Commission des Finances et du Budget de la Chambre. Originally created to contribute to the funding of Belgian cinema and restructuring of Belgium's audiovisual sector, the Tax Shelter seems to have evolved during its 10 years of existence into a financial investment with no risk, offering lavish returns to investors who could not tell Alain Resnais from Fabien Onteniente. As the yield no longer depends solely on a film’s success, but rather results from prior agreements made with intermediaries wanting to draw in investors, it is easy to conceive that this return on the investment is often detrimental to the investment itself, and therefore to audiovisual production.
Last July, the Wallonia Brussels Federation submitted a draft reform of the Tax Shelter to the Belgian Parliament, aiming to re-evaluate the system after ten years of activity. Indeed, although the exponential increase in the sums raised thanks to the Tax Shelter can only be praised, and this despite the financial crisis, one has to admit that the type of productions supported has significantly evolved since the creation of this mechanism. Today, even Steven Spielberg and Nicole Kidman (photo) find themselves filming in Belgium (read the article). What was supposed to help the development of local productions has now become a particularly attractive possibility for many international productions. If this Belgian relocation of international productions of worldwide scope is not in itself a bad thing, what is more worrying is that the share of funding covered by the Tax Shelter for majority Belgian feature films is declining, as emphasized by Frédéric Delcor during the CCA’s review. From almost one quarter of the budget covered by the Tax Shelter in 2010, 2012 saw a share of slightly more than one-fifth.
Institutions and industry members are therefore currently rallying for a reform to be passed that should enable the Tax Shelter to return to the spirit of the law, notably by providing an obligation for spending directly related to production to attain 70% of the amount invested, or by creating a control mechanism for intermediary companies in charge of raising funds.
(Translated from French)
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