Belgium: a favoured location for film production?
In force for fifteen years now, the Tax Shelter mechanism is contributing to the rude health of the sector.
The exponential growth seen in TS investment reflects the attractiveness of the product. Courtesy of its unique dual structure combining the raising of funds (SCOPE Invest) with the executive production of cinematographic works within Belgium (SCOPE Pictures), SCOPE has become a key player on the Tax Shelter market. In total, nearly 200 works have benefited from funds via the Tax Shelter1 mechanism. But what are the precise conditions whereby a film can receive funding via this system? And how does SCOPE assist the investor?
1. To view the full list of the works for which SCOPE Invest has raised funds, you can visit the filmography, or consult Appendix 13 of the Prospectus of 22 May 2018.
Last update on : 13.05.2020
The type of work, its correct completion and the expenditure derived from it on Belgian soil constitute the chief eligibility criteria. This is not surprising given the objective which the legislator set itself in 2003: to promote the development of the audiovisual sector in Belgium through the intermediary of a fiscal incentive called the Tax Shelter.
European audiovisual works. In order to benefit from Tax Shelter funding, a project needs to have gained advance approval from the relevant Community as a European audiovisual2 work. It may be a film (fiction, documentary or animation), a non-advertising short film, a long TV fiction film – possibly in episodes –, an audiovisual series (fiction or animation) or a work aimed at a target audience aged from 0 to 16 (fiction series with educational, cultural or informative content, or a TV documentary programme).
Works of which the correct completion is guaranteed. In order to ensure that Tax Shelter certification is issued, the film must be finished. The producers and coproducers (in this case SCOPE Pictures for audiovisual works) or, failing that, an independent body, vouch for the correct completion of the work in a Letter of Undertaking. In other words, the signatories stipulate that they have or will put together the investment required to cover the entirety of the film’s budget and that they will undertake to issue all of the print material, along with the inspection stamps required for its showing in cinemas, by the agreed date.
Works coproduced in Belgium. The allocation of the budget linked to the production and showing of works is a critical aspect of the Tax Shelter mechanism. SCOPE takes charge of the management within Belgium of a set of expenses of an amount equivalent to at least 90% of the tax certificate’s value, within a maximum period of 18 months following the signing of the framework agreement3 binding SCOPE to the investor (24 months for animated films). SCOPE also oversees the overall equilibrium of the film by ensuring that the sums collected under the TS and paid out within the framework of the film’s production and marketing do not exceed 50% of the overall expenditure, as stipulated by the legislator.
2. Within the definition of Art. 194ter, paragraph 1 (4) of the 1992 CIR.
3. For full details of the types of production and exploitation expenditure which are eligible, see point 7.2.1.1.5, p.75 of the Prospectus of 22 May 2018.
Last update on : 13.05.2020
In the light of the aforementioned criteria – first and foremost the amount of Belgian expenditure, the film’s state of progress and its feasibility with a period permitting the expenditure to be incurred in Belgium –, SCOPE selects a certain number of projects. However, it extends this examination by providing financial and artistic expertise on an ad hoc basis. SCOPE evaluates the development prospects of a work on the basis of a more extensive set of elements such as the main producer’s reputation and that of the companies tasked with marketing the film, the renown of the main actors, the interest of the subject dealt with and the quality of the screenplay, together with the work’s financial soundness.
A Tax Shelter operation in partnership with SCOPE offers the best possible scenario for your investment.
Last update on : 13.05.2020