Forming part of the fiscal measures introduced and supported by the Belgian federal government, the Tax Shelter enables any participating Belgian company to reduce its taxable base by a maximum of €1,000,000 (*) per financial year (tax year 2021), to benefit from an immediate tax break and to conduct a financial operation designed to offer an attractive positive return. For a business, investing in a Tax Shelter operation means generating a return from part of your tax!
(*) The absolute tax break ceilings are doubled, as a result of the COVID-19 health crisis, for framework agreements signed during a taxable period ending no later than 31 December 2021.
WARNING For the investor, the operation consists of making a payment of funds without eventual repayment in the aim of obtaining a Tax Shelter certificate linked to an eligible work (audiovisual or theatrical) which, under certain conditions, entitles the investor to a tax exemption. The Tax Shelter features risk factors. The main one of these is the risk of not obtaining or only partially obtaining the tax benefit for the investor. The consequence of this is the total or partial loss of the amount invested should the guarantee mechanisms be inoperative, - as stated in our Prospectus dated 23 July 2020, briefly in the warning on the cover, and more comprehensively on pages 15 and 18. The approval of the Prospectus by the FSMA should not be considered as a favourable opinion on the offer it contains. SCOPE Invest’s service concerns investments within the framework of the Belgian Tax Shelter system (for the audio-visual & performing arts sectors) in accordance with the provisions of Articles 194ter and following of the 1992 Income Tax Code (hereinafter 1992 CIR). Participation in the offer does not impose a minimum amount on the investor and does not involve any costs for the investor other than the payment of the investment. Companies interested in SCOPE Invest's offer are invited to read the full information contained in the Prospectus and to confirm the advisability of making the investment with their usual financial and tax advisers.
A Tax Shelter operation offers a potential net global gain of approximately 10% of the sum invested. The fiscal yield is 5.3%, plus interest paid no more than 18 months after the investment.
Since 2007, SCOPE Invest has been publishing an annual FMSA-approved Prospectus which provides the investor with all the information required to make a Tax Shelter investment. The approval of the Prospectus by the FSMA should not be considered as a favorable opinion on the offer it contains. The current Prospectus was approved on 23 July 2020 and is valid until 22 July 2021.
Producing a film (or a theatrical work) consists primarily of assembling the financial resources required for its completion. A mechanism used in Belgium since the year 2000, the Tax Shelter enables producers to find funding from Belgian companies, which reciprocally benefit from a yield from their investment.
Courtesy of the Tax Shelter, SCOPE has already helped to fund over 200 feature films that have garnered both commercial success and awards at prestigious festivals (including 2 Palmes d'Or, 1 Silver Bear and over 18 films in the official selection at the Cannes Film Festival, 111 César nominations, 4 Oscar nominations and 22 Magritte's).
The government of the Wallonia-Brussels Federation has issued a special powers decree to speed up the resumption of film shooting by setting up a guarantee fund. A health protocol has been established by the Federation to allow the resumption of film and series shootings from 8 June. Unfortunately, insurance companies are still categorically refusing to include Covid-19-related risks in conventional production insurance. In fact, this situation leads producers to be very cautious, as the financial consequences of interrupting or abandoning filming would weigh too heavily on their shoulders. This could lead to the absence of any resumption of activity. This guarantee, intended to compensate filming started between 1 July and 30 September 2020 that would be interrupted or suspended due to the health crisis, will have a deductible and has a three-fold ceiling: compensation limited to €1m per film, 20% of the film's total budget and a maximum of €5m in compensation for the total number of claims covered. The Guarantee Fund will only cover a period of three months, traditionally very important in terms of filming. At the end of this period, this emergency mechanism could be replaced by another, either entirely borne by the insurers or jointly by the insurers and the public authorities.
As part of the Covid-19 pandemic, a first strong measure was taken by the Tax Shelter unit on March 13, 2020 to allow producers to extend by 6 months the period during which expenses eligible for the Tax Shelter can be performed. This measure is on the way to be confirmed within the framework of a bill of May 20, 2020 carrying various urgent fiscal measures because of the health crisis. Producers should now benefit, for all projects affected by this crisis, from a period of 24 months to spend on audiovisual works, and 30 months for animation projects and scenic works. Other exceptional measures are expected to be confirmed very soon. These must still be validated during a vote in plenary session in the Chamber: - The temporary increase (until the end of December 31, 2021) of the absolute investor exemption ceiling should be doubled: € 1,700,000 (instead of € 850,000) for the financial years ending no later than December 30, 2020 and 2,000,000 € (instead of 1,000,000 €) for financial years ending between December 31, 2020 and December 31, 2021). - Anteriority of expenses: article 194ter CIR92 allows, under certain conditions, to make previous expenses of maximum 6 months at the signing of a Framework Agreement. This principle of anteriority is not valid for Scenic Works. By this adaptation of the law, the priority should apply to Audiovisual and Scenic Works. Concrete measures that would allow the cultural sector to breathe a little more freely.
For companies that end their fiscal year in March, the deadline for making advance payments has passed since March 20. Companies that find themselves in the absence or insufficiency of advance payments will be taxed at a higher rate. The increase applied to the basic tax amounts to 6.75%! There is a simple way to lower the score: make a Tax Shelter investment before the end of the fiscal year. This will be "doubly" profitable since it will, in addition to the tax yield of the Tax Shelter (5.25%), reduce the increase for insufficient advance payments. Indeed, the fact of making a Tax Shelter investment decreases the taxable base, and therefore the amount subject to the increase. More than ever, in such a case, think of the Tax Shelter!
By letter sent this Friday, March 13, 2020, the Tax Shelter cel of the Ministry of Finance officially announced the 6-month extension of the deadline granted to audiovisual and performing arts producers to make their expenses. The Tax Shelter law requires that eligible expenses have to be made within a maximum period of 18 months (24 months for animated films and performing arts) after the date of signing framework agreements with investors. In practice, this means that producers do not have to hang around to spend once the funds have been raised. The coronavirus crisis leads, as in all sectors, to a slowdown in activity which can resemble paralysis. How can we imagine, in the circumstances we know, the organization of a filming in Belgium? This measure taken on Friday by the Tax Shelter unit therefore allows a 6-month postponement of expenses in current projects for which funds have been raised. Good news for our sector!