21/05/2007

Belgian producers have been ringing alarm bells since last Friday at Cannes following the federal government’s submission of a tax shelter report to the European Commission, which has until June 30 to decide on the extension of the Belgian tax incentive system in support of film production. It seems as if Europe has had reservations about this report and about the new proposition, which, it anticipates, will be more oriented towards the cultural and structuring aspects of the law.

Federal Minister of Finance Didier Reynders – expected to attend a workshop on the tax shelter at Cannes on Monday and who in the end cancelled – said in a recorded speech that the Belgian tax incentive system could not be put into question on a European level and "that everything should go on as usual".

He also mentioned some of its possible developments: an increase in the investment ceiling from €750,000 to €1.5m, the extension of the tax shelter to individuals who could invest through SICAVs (investment companies with variable capital) or other funds, and its extension to the performing arts sector. The opinions expressed by the EU are expected to be limited to minor modifications and clarifications, according to a representative of the Ministry of Finance Alexandre De Geets, who attended the Cannes workshop and preferred not to comment any further.

Representatives of the two Belgian Producers’ Unions, Patrick Quinet (Artémis Productions) and Peter Bouckaert (MMG), both gave reassuring speeches. According to Quinet, the report just needs to be reworked with the representatives of the Francophone and Flemish communities. Bouckaert, without being more alarmist, nevertheless stressed that "if the Belgian tax shelter is not continued, it will be terrible news for the film industry of our country, a small country that would not be able to survive without this funding. But we aren’t worried for the time being."

This new source of questioning comes after a recent debate that exaggerated the structuring effects of the tax shelter in the audiovisual sector. While the legislation has helped to raise €40m in three years and everyone is unanimous on its important role – some mentioning investment of up to 80% in the audiovisual sector – others have strongly disputed the beneficial and structuring effects in the sector.

Moreover, this news comes only a few weeks before the Belgian general elections, which are expected to bring about a change in government. This could slow down the submission of the modified text to the European Commission.

(Translated from French)