20/07/2007

The European Commission yesterday gave Belgium its permission to extend until December 31, 2009 its tax incentive scheme known as the tax shelter, aimed at supporting audiovisual production. The film funding mechanism allows companies to declare sums invested in audiovisual production as tax deductible.

Initiated in 2001 and set up in 2003, the Belgian tax shelter was due to end on June 30 but expected to be extended, provided it was granted approval by the DG Competition.

The announcement of a possible end to the scheme caused uproar at the latest Cannes Film Festival (see news), with the Commission apparently having asked for further information and modifications to be made to the report submitted by the cabinet of the Federal Minister for the Economy, Didier Reynders.

The Commission stated the report was too focused on the economic aspects of the fiscal measure, something that was neither confirmed nor denied by any representative of the minister at Cannes, despite the many questions asked by industry professionals and journalists present.

The decision comes one month after Viviane Reding announced the general extension by the Commission on rules governing the public funding of film and audiovisual works (see news).

Since it was set up in the cinema and television sectors, the Belgian tax shelter has helped to raise almost €60m (latest figures from 2007). A number of films, such as Luc and Jean Pierre Dardenne’s The Child [+see also:
film review
trailer
interview: Luc & Jean-Pierre Dardenne
film profile] and Jaco Van Dormael’s upcoming film Mr Nobody (see news), were partly financed by the tax shelter, a measure vital to the survival of the Belgian film industry.

(Translated from French)