Tax Credit - France

http://www.filmfrance.net/v2/gb/home.cfm
1. What is it?
In December 2008, the French Parliament enacted a law creating a new credit for foreign productions shot in France.

The law is designed to promote actual film production as well as post-production services of movies whose “dramatic content” has links with the “culture, heritage or territory of France”, to quote the text of the law.
The rebate, worth 20% of all eligible costs, is capped at Euros4 million (USD5,3 million *). Eligible costs include authors’ rights (through French contracts), crewmembers’ salaries, actors’ salaries (up to the minimum rate of the collective bargaining agreement), technical costs (rentals and purchases), locations fees, transportation, food, and all fringes.

In 2009 only, films that have started shooting before the procedure is official, and that happen to be eligible afterwards, will be able to get the rebate for all expenses made since January 1st 2009.


* Rate : €1 = USD1.32838 (04/09/09)

2. What are eligible movies ?
In order to get a rebate on expenditures, theatrical movies, TV movies, and series will have to pass a test. The draft test is currently being reviewed by the European Commission for validation before its implementation in France. Therefore, all the details are not yet final. It would assess the content, the creative contributors, and the technical infrastructure of the movie. A special test has been designed for animated features so as to take into account the specificities of such films.

Other main conditions set out by the law to get the rebate are to shoot at least five days in France (except of course for animation works) AND to spend at least 1 million E uros in France on eligible costs.

3. How will it work?
Once the foreign producer has signed a deal with his French line producer, the latter will be able to submit an application with the needed documents to the CNC *. He will get a return receipt. No expenditures before the reception date of the application form will be eligible (except for films shot in 2009, see above).

Any company incorporated in France can be the line producing company applying for the rebate. It can be a subsidiary of the foreign producing company itself, even specially created for this purpose. However, given the existing French tax and corporate law, this option might not be the most convenient one.
Then, a committee of the CNC, with the assistance of Film France, will determine the eligibility of the proposed foreign production. If approved, the CNC will issue an official letter of agreement . This agreement will be delivered on a provisional basis and will have to be confirmed after the completion of works. The CNC Committee will gather on a regular basis. If accepted, the French line producer will receive an official letter of agreement.

The French line producer will then be awarded the rebate by the French Tax administration , as a credit against its corporate tax, at the end of the fiscal year(s) of the shoot. If its corporate tax is less than the amount of the rebate, the French line producer’s company will get a cash refund from the tax office. Since the law aims at attracting foreign productions to France , the contract between the French line producing company and the foreign producer’s company is to be a part of the application when filing with the CNC.
Remember to exclude the tax credit from your film budget.
Check QuickFilmBudget.com for a sample film budget.