Culture is the second hardest-hit sector after hospitality.
“Everything’s at a standstill. No one’s shouting ‘action’ any more, the sets are deserted and you can hear a pin drop in the post-production studios. While there have been fictional viruses and pandemics depicted in many a film and spine-chiller, the sadly real Covid-19 has halted production worldwide, from Hollywood to Mumbai via Cinecittà, London and Paris. In Belgium, filming on around a hundred productions has been suspended or delayed, turning the whole industry on its head.”
The journalist and film critic, Louis Danvers, sets the scene in his article entitled “Silence, on ne tourne plus!” (“Quiet please, we’ve stopped filming!”) , published in the Focus supplement in Le Vif.
Yet the coronavirus has hardly even started to make its presence felt; barely two weeks of lockdown have passed in Belgium and the world are discovering to their utter amazement that a microscopic virus has been able to bring an entire economy to a grinding halt – albeit temporarily.
1. "Silence, on ne tourne plus!", Le Vif (Focus), 2 avril 2020, Louis Danvers.
Last update on : 01.09.2020
“Cinemas closed, film shoots suspended or delayed, films put on hold or switch to VOD, festivals postponed or cancelled, crews placed on furlough, educational sessions cancelled, tax shelter in recession... The cinema world is also facing an unprecedented situation. And it’s painful, hurting every level of the industry badly,” analysed Fabienne Bradfer and Gaëlle Moury in Le Soir on 19th March 2020 .
“With takings down 74%, culture is the second hardest-hit sector in Belgium, after hospitality,” we read in the business newspaper L'Echo on 11th April 2020. The paper’s analysis is a good one, coming as it does from the Economic Risk Management Group (ERMG), the working group currently examining the extent of the effects of a crisis never before seen for the economy and the financial sector and charged with coming up with recommendations for support measures to the government.
The health crisis and the ensuing lockdown have paralysed production activities, such as film shoots and rehearsals, as well as travel for crews, shipping equipment and sending out engineers, etc.
This unprecedented and totally unforeseen situation is forcing the entertainment industry to take brutal decisions linked to its very survival, while waiting for it to be possible to put recovery policies in place. This is particularly the case for some theatres that have purely and simply been forced to cancel their season by the uncertainty surrounding the length of the crisis and by the impact that it will have on the financing of productions.
2. "Victime du coronavirus, le cinéma bascule en terre inconnue", Le Soir, 19 mars 2020, Fabienne Bradfer et Gaëlle Moury.
3. "On n'arrivera jamais à faire en sorte que cette crise n'ait pas existé", L'Echo, 11 avril 2020, Xavier Flament.
Last update on : 01.09.2020
An initial strong measure was taken by the Tax Shelter unit on 13th March 2020, giving producers a 6-month extension to the period in which spending eligible for the Tax Shelter could be made. This measure has just been reinforced by the laws of 29th May and 15th July, applying a range of urgent fiscal measures on account of the pandemic. For all of the projects affected by the crisis, producers now have a period of 30 months in which to make spending on their audiovisual projects and 36 months for animation projects and stage set works.
The Tax Shelter currently represents approximately 30% of funding for audiovisual and set production in Belgium; it is absolutely vital for the sector to adjust its regulations to make it through.
Last update on : 01.09.2020
The health crisis is creating a situation in which spending is being deferred and this, in turn, may cause difficulties for producers to make that spending within the deadlines set by law if the restrictions extend for a period longer than the 12-month “extension” granted by the lawmakers.
If this were to be the case, it would result in this expenditure becoming invalid in terms of the mechanism of the Tax Shelter legislation. This would mean that the tax certificates issued for the Framework Agreements covered by this spending would become ineligible.
Very fortunately, this nightmare scenario is not the case at SCOPE Invest:
“The vast majority (88%) of our productions for which we have raised funds since 1st January 2019 are absolutely out of danger,” stresses Olivier Colin, Chief Operating Officer at SCOPE. “This is for the good reason that Belgian spending part has already been made or that at least the shooting part of the films in hand is complete. The fabrication costs still to be incurred on films still being shot – and hence which are currently at a standstill – affects barely 1.19% of the total eligible expenditure for the period in question. This situation applies to activity at SCOPE Invest, which is very important when it comes to accurately estimating the risk of the Tax Shelter investors.”
Last update on : 01.09.2020
It remains to be seen whether it will be possible to raise funds from investors once the resumption of activities has been confirmed. Indeed, the Tax Shelter is based on the ability of Belgian businesses to make profits. Apart from a few sectors that have been spared by the crisis, prospects don’t look very encouraging for the financial year underway.
A number of exceptional measures have been taken, however, passed by the Chamber’s Finance Committee on 6th May 2020. These measures were ratified by a vote of the full Chamber on 20th May 2020. In addition to the extension of the period allowed for spending to be made, these measures relate to:
These are practical measures that allow the cultural sector to breath a little more easily.
Last update on : 01.09.2020