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Belgium considers cinema tax shelter reform

11:45 25/03/2013

Belgium’s parliamentary finance and budget committee is examining the idea of whether to reform the mechanism providing tax relief to Belgian companies that invest in the cinema and audiovisual industry, writes Tax News’s Ulrika Lomas. The scheme, implemented after a  2003 Royal Decree, attracted around €600 million in investment between 2003 and 2011 (with €150 million in 2011 alone), becoming the largest source of income for the Belgian film industry. The mechanism is considered lucrative for investors looking for a secure investment in turbulent times. Despite its popularity, the system has come under increasing criticism. Last July, the Wallonia-Brussels Federation submitted its plans to reform the scheme to the Belgian parliament. Opponents of the regime say the tax shelter attracts only international filmmakers and does not support or promote local productions or encourage diversity, as was initially intended. The incentive allows a company wishing to invest to benefit from a tax credit worth up to 150% of the sums invested and is designed to ensure limited financial risks for the investor. All resident companies and Belgian establishments of non-resident companies can benefit, with the exception of companies whose main purpose is the development and production of audiovisual works and television broadcasting companies. To qualify, the production must be an audiovisual work: a full-, medium- or short-length film, a documentary or an animated film intended to be shown in a cinema, an animated series for television, a documentary for television, a long film made for television or a series for children.

Written by The Bulletin