An investor’s guide.
Fancy generating yield from your tax while at the same time supporting Belgian and European audiovisual (or theatrical) productions? Like the prospect of an attractive investment plus positive spin-offs for the Belgian economy? It’s all possible thanks to the Tax Shelter. Thousands of Belgian companies of all sizes and from all sectors are already banking on it and, as a pioneer on the Tax Shelter market, SCOPE is the partner of choice for your investments. So if you’d like to know more about the conditions that must be met in order to benefit from the Tax Shelter, follow the guide.
Last update on : 22.06.2020
WHO? Any Belgian company or Belgian subsidiary of a foreign company1, all sectors included, can invest in the Tax Shelter. From sole traders to BEL-20-listed companies, there is no size limit. Private individuals, however, are not permitted to take advantage of the tax shelter.
The sole type of company not permitted to use the Tax Shelter are those whose main business is the production of audiovisual works or who are directly linked to companies of this type. Television broadcasting companies are included in this restriction.
HOW? Investors meeting these qualification criteria are required to sign a framework agreement with a production company, possibly through an approved intermediary. They must also undertake to pay the agreed sum within three months of the contract’s signing2. The amount is capped at €238,764 (2019 financial year), giving an exemption level of €850,000, without exceeding half of the taxable profit reserves achieved during the financial period and year of the investment.
THE BEST PARTNER? Courtesy of its dual structure which positions it both on the Tax Shelter market (SCOPE Invest) and as an eligible producer (SCOPE Pictures and Sceniscope), SCOPE is the only contact you’ll need. By managing the budget, SCOPE ensures that the Tax Shelter requirements are met in terms of the production and distribution expenditure connected with the funded work.
1. Legal references: Article 194ter and following of the 1992 Belgian Income Tax Code, as amended by Article 128 of the Program Act of 2 August 2002, and as amended by Article 291 of the Program Act of 22 December 2003, Article 2 of the Law of 17 May 2004, the Law of 3 December 2006, Article 7 of the Law of 21 December 2009, Article 12 of the Law of 17 June 2013, the Law of 12 May 2014, the Law of 26 May 2016 and the Law of 25 December 2017, a coordinated text having been included in Appendix 1 of the Prospectus of 22 May 2018.
2. For comprehensive information on the procedure, please see the article “What is the audiovisual Tax Shelter?”
Last update on : 22.06.2020
As an eligible production company (SCOPE Pictures or Sceniscope) and an approved intermediary (SCOPE Invest), SCOPE undertakes to sign a framework agreement with the investor covering all the obligations stipulated by Tax Shelter3 law.
SCOPE will in particular seek to ensure the correct allocation of all sums collected via the Tax Shelter mechanism and the overall balance of each film’s budget, with the total of the Tax Shelter sums paid not being permitted to exceed 50% of overall expenditure. So as to meet the socioeconomic issues that are a central plank of the Tax Shelter initiative and to thus ensure that tax certification is obtained, SCOPE manages overall expenditure in Belgium of an amount equivalent to at least 90% of the certificate’s value, within a maximum period of 18 months from the signing of the framework agreement4 (24 months for animated films and theatrical works).
The films, over which SCOPE reserves the right of selection, have to be approved by the Community concerned as European audiovisual works5 (or as theatrical works for “performing arts” projects). SCOPE and its co-producers act as guarantors for the correct completion of the film.
In the final step, SCOPE will transfer a Tax Shelter certificate to the investor for a maximum fiscal value of nine tenths of the production and operating expenditure. This certificate will be issued no less than 3 months after the payment of the investment and, at the latest, by 31 December of the fourth year following that of the framework agreement.
The issue of this certificate is subject to compliance with the terms of the Tax Shelter legislation.
For legal entities benefiting from a reduced rate of taxation, the overall gain over the term of the operation may be negative by as much as -27.38%.
Investors should examine their own specific situation with their usual tax adviser prior to making any investment decision.
A Tax Shelter operation in partnership with SCOPE offers the best possible scenario for your investment.
3. See in particular Art. 194ter of the 1992 CIR on the Tax Shelter system.
4. For full details of eligible production and operating expenditure, see point 7.2.1.1.5, p.75 of the SCOPE Invest Prospectus of 22 May 2018.
5. Fiction film, documentary or animation, non-advertising short film, long TV film, in episodes or otherwise, TV fiction or animation series, series aimed at children or young people, namely a fiction series with educational, cultural or informative content for a target group aged from 0 to 16, or a TV documentary programme.
Last update on : 22.06.2020