The Belgian system is different from classic tax-reliefs which usually allow the producer to receive public support provided the film has economic ramifications in the country. The Belgian system was created to encourage investors which do not traditionally invest in the TV and film industry to put money into production. In Belgium, financial incentives are designed to attract such great and wealthy companies as Kellogg’s or Procter & Gambles. The scheme works as follows:

1. A company which invested in a project may claim tax deductions for 150% of the invested sum. The first condition is of course is that the company is already a tax-payer. Should the investor put €100,000 into a project, he may therefore claim €51,000 worth of tax-relief. This amount is calculated as follows: €150,000 (that is, 150% of the initial €100,000 investment) x 34% (Belgian income-tax on companies) = €51,000.

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There are obviously certain limits and conditions:

a) the above-mentioned 150% may not exceed 50% of the taxable benefits;
b) the 150% may not exceed a total value of €750,000. To make the best out of this scheme, the taxable sum should amount to at least €1,500,000. In this case, the investor may deduct €750,000 from his taxable income; his fiscal contribution will be calculated on €750,000.
c) the investment may not exceed 50% of the budget;
d) the investment may take the form of a loan for 40% maximum, and of a co-production for the remaining 60% (investment at a risk). If the producer is in good financial shape, the investor is sure to recoup 40% of his investment.
2. The Belgian producer receiving the investment must spend 150% of the co-production part in Belgium (i.e. 90% of the investor’s money).

3. The investing company must be Belgian or pay the tax in Belgium. Producers and broadcasters are not eligible. The producer must be a Belgian company, and the production must be a cinema feature. The only eligible TV programmes are animation series, documentaries, and TV movies (of over 52 min, criterion valid until end of 2006).

4. It is possible to bring in several Belgian investors to cover up to 50% of the production budget. The investment can also be spread over several productions.

5. This scheme is not exclusive of any other form of support —national or European.

The system was designed to minimize the risk for the investor:

Initial investment 100
Tax-relief: 150 x 34% - 51
Repayment of loan - 40
Intermediary costs (5%) 5
Investment at a risk* 14

* in consideration for a share in the benefits generated by the film