2017: record year.
2017 ended with a record number of cinema films having been approved within the Wallonia-Brussels Federation.
The amounts invested since the Tax Shelter’s introduction in 2003 have also passed the billion euro mark. What’s more, the changes made to the legislation, whether the extension of the TS to the performing arts or the reform of corporation tax, herald the prospect of the same or even greater dynamism. So let’s take a look back at recent TS news and also examine its future prospects.
Last update on : 20.04.2020
The figures speak for themselves. In just two years, the number of works approved has risen by 76%. In 2017, no fewer than 378 works were approved in the French Community to benefit from TS funds in 2017, compared with 287 in 2016 … a previous record now greatly surpassed. The amounts raised have themselves reached the historic threshold of one billion euros. Meanwhile, the number of projects which have seen the light of day courtesy of the TS has soared too, with a total of 1,282 initiatives having benefited from the mechanism.
Last update on : 20.04.2020
The new extension to the Tax Shelter has been up and running for over a year. A whole range of stage productions are now eligible, including theatre, circuses, music & opera, dance, or a combination of these arts within a “full show”. And the results recorded have been particularly encouraging, with over 40 million euros raised in 2017 for the performing arts, nearly 80% of it for works approved in the Flemish Community1. Proportionally, the main beneficiaries of the TS mechanism have been theatre and classical music2.
1. 300 projects have already been approved in the country as a whole, for investment estimated at nearly 43 million euros.
Last update on : 20.04.2020
While the corporation tax rate has been lowered (decreasing gradually from 33.99% for the 2018 financial year to 29.58% for the 2019-2020 period, then to 25% from the 2021 financial year), the TS remains as advantageous as ever. In fact, the exemption percentage of a TS investment has undergone a set of corrective adjustments (going from 310% in 2018 to 356% and, from 2021, to 421%) aimed at ensuring the mechanism’s profitability. The maximum amount of annual exemption increases to €850,000. The overall potential net gain is also on the increase, if one takes into account the fact that the additional yield (the interest paid by the producer to the investor after 18 months) will be taxed at the new lower corporation tax rate.
With the reform of corporation tax, the tax yield from a TS operation remains stable (5.3%) for companies which make a pre-tax profit of at least €160,000 and are taxed at the normal rate. For “small companies” which benefit from the reduced tax and whose pre-tax profits don’t exceed €100,000, the Tax Shelter no longer constitutes an advantageous opportunity.
The maximum investment capacity is being reduced to €238,764 (850,000/3.56), compared with €241,935 for previous financial years (750,000/3.1).
Last update on : 20.04.2020