03/11/2005

The sword of Damocles hangs over the future of one of the French film business’ mechanisms for film and audiovisual production finance: the Sofica operations. These investment companies, who allow private investors to benefit from tax relief and companies with shareholders to amortise their investment, are threatened with fiscal reform being currently studied by Parliament and which will come into force in 2007. The project, which transforms notably the tax deduction based on a reduction with a tax-free ceiling of 8000 euros per person against 18 000 euros currently, risks putting investors off, to the benefit of other more advantageous schemes with no connection to film and audiovisual production.

In 2004, 55 longs features (53 films initiated from France and 11 features) were financed by 10 Sofica operations to the tune of 27,67 million euros. These investments represented 6,8% of the budget of the films concerned and the mechanism proved to be attractive since it rose to 80 million euros with a ceiling of 46 million (film and audiovisual). The Minister for Culture Renaud Donnedieu de Vabres hopes to raise the ceiling for 2006 to 50-52 million euros to encourage risk taking and aid young filmmakers (35% of the investments from the Soficas is destined for independent production). The CNC has created a charter to this end for all the Sofica candidates for 2006. But good intentions have every chance of being reduced to nothing if the tax plan for 2007 is formerly adopted as it now stands.

(Translated from French)