03/01/2006

Last Thursday, the French Constitutional Council revoked the 8,000-euro tax break maximum – as opposed to the previous 18,000 euro – for individual investments in Soficas ( film and audiovisual industry finance companies). Included in the 2006 Finance Law and voted in at the end of November by the French Parliament, this maximum was rejected by the French Constitutional Council on the grounds that "when the tax law is overly complex, it becomes unintelligible for citizens." This revocation is very good news for French film production. In 2004, 55 feature films received Soficas funding, to meet 6.8% of their budgets. Moreover, the amount that the French government will allocate to Soficas increased from 46m to 56m euro for 2006, and independent production was strengthened as a result of a charter signed by the French Cultural Ministry and the National Film Centre (CNC).
In November, all French professional production and distribution companies had asked the government for the Soficas to be removed from the list of financial organizations required to maintain the 8,000-euro tax relief ceiling. What were considered to be protests made in vain found an unexpected ally in the French Constitutional Council. Its decision will exempt cinema from analogous tax relief measures, which should allow for it to attract private capital. 16 Soficas were certified by the French government for 2006, six of which will guarantee returns in five years (on average, 85% of the initial amount). The remainder, however, are more risky and their approval will depend on the success of the films funded.

(Translated from French)