A Tax Shelter investment entails risks that should be considered before investing.
Producing an audiovisual or theatrical work is a high-risk activity. For the investor too, the Tax Shelter investment presents certain risks, the main one of which is not obtaining or only partially obtaining the certification issued by the SPF Finances that finalises the tax relief.
The most common reasons that might result in certification of the tax relief not being obtained (or only partially obtained) are as follows:
All of the risks are detailed in section 2 of the Prospectus. Investors need to be aware of these risk factors before making any investment decision.
For optimum management of the risks to which investors are exposed, SCOPE is careful to select audiovisual or performing arts projects for which the pre-funding is already well underway and for which the main assessment criteria have been met. This “green light” procedure is a key stage in the (co)production profession and provides initial protection for the investor.
Another element to be taken into account by the investor before choosing their Tax Shelter partner is the latter’s financial soundness. What capacity does the producer have to reimburse and/or compensate the investor in the event of a problem?
Apart from its proven experience of the industry (over 100 audiovisual projects which have already passed the relevant audits), SCOPE possesses the particularity, courtesy of SCOPE Pictures, of carrying out the auditing of required Belgian expenditure internally.
Finally, the company offers investors a joint indemnity commitment covering the possible loss of the tax benefit and involving the various companies in the group: SCOPE Pictures (or Sceniscope for "performing arts" projects), SCOPE Invest and SCOPE Immo. SCOPE benefits from a certain capital base (7 million equity at 31 March 2020) and believes that it is able to cover the main risk related to the failure of investors to obtain their tax certificate.
All of the risk management mechanisms are described in section 3 of the Prospectus.
The operation consists, for the investor, of a payment of funds without any future repayment, with the aim of obtaining a Tax Shelter certificate linked to an eligible work (audio-visual or scenic) which, under certain conditions, entitles the investor to a tax exemption. The Tax Shelter involves risk factors, of which the risk of not obtaining or partially obtaining the tax advantage on the part of the investor is the main risk - resulting in the total or partial loss of the amount invested, in the event that the guarantee mechanisms prove ineffective - which are set out in our Prospectus of 23 July 2020, briefly in the disclaimer on the cover and more fully 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 offer concerns an investment within the framework of the Belgian Tax Shelter regime (audio-visual & performing arts) in accordance with the provisions of articles 194ter et seq. of the Income Tax Code 1992 (CIR 1992). Participation in the offer does not impose a minimum amount on the investor and does not involve any costs for the investor apart from 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.