Review of co-production deals
by Annika Pham
The UK government has announced a major review of international co-production treaties, to make sure that Britain will benefit culturally and economically from these agreements, and in a bid to cut down on abuses from co-production partners wishing to access UK tax relief.
The tougher co-production guidance, which replaces the existing document, was produced after wide consultation with the UK industry and international co-production partners, and is supported by the UK producers association PACT, the UK Film Council and the British Department of Culture, Media and Sport (DCMS).
The new guidance (available on the DCMS website) introduces new obligations, such as the need for applications to be submitted to the DCMS four weeks before production starts, and tighter requirements for auditors’ reports. It also clarifies the basis on which the DCMS grants British Certification to international co-productions (films made by two or more countries) enabling them to apply for film tax relief.
“Co-production is central to the future of the British film industry and the UK can lead the way”, said Estelle Morris, the UK Film Minister. “But it is a two-way deal. Co-productions and the associated tax breaks must lead to more jobs in film in this country and more work for our film making facilities. I am determined to ensure the right people are reaping the benefits and we will be monitoring the system to ensure just that”.
From 2005, co-productions with Canada (which have already been accused of abusing the system) will be the first ‘victims’ of the up-dated guidelines, which have doubled the minimum amount required to be spent in the UK from 20% to 40% of a Canadian co-production’s film budget.
Films qualify as “British” if either 70% of the budget is spent in the UK or through co-production agreements. The UK has bi-lateral co-production agreements with Australia, Canada, France, Germany, Italy, New Zealand and Norway and through the European Convention on Cinematic Co-production, other treaties with a further 30 European countries.
In the early 1990s, around 20 co-productions were made each year, but 2003 will see around 200 UK co-productions.
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