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A tax advantage for Belgian companies investing in the production of audiovisual works
Financing limits: The total sums paid by all investors may not exceed 50% of the total production
budget
The fiscal value of the Tax Shelter Certificate may not exceed € 15 millions per eligible work
TAX SHELTER
Eligible works Audiovisual works: - fiction films (long, medium and short-length films) for cinema - documentary films for cinema - animation films for cinema - fiction and animation long films for television, possibly divided into episodes - documentary films for television - series for children or youngsters
European works: - as defined by the Directive of March 10th 2010, called « Audiovisual Media Services » - or bilateral co-production agreement between Belgium (or a Belgian Community) and a third country
TAX SHELTER
The Tax Shelter Certificate The « 70/90/70 rule »
System based on production expenses
Qualifying expenses = expenses EEA (direct + indirect), linked to the production
Fiscal value of the Tax Shelter Certificate = 70% of qualifying expenses EEA
of which 90% (direct + indir) expenses in Belgium
of which 70% direct expenses in Belgium
The Investor prefinances the producer expenses and receives in return a Tax Shelter Certificate
Signature of a framework agreement
• 3 months to pay the sums
• Temporary tax deduction: sums paid x 310%
• Definitive tax deduction: 150% of the TS Certificate
• Return on sums paid: Euribor rate + 4,5% (max 18 months)
Investor Producer
The Tax Shelter Certificate
EXAMPLE 1: Acquisition of a Certificate of 100 000 €
Qualifying expenses (direct + indirect) EEA: 142 858
Fiscal value of the TS Certificate = 70% of qualifying expenses EEA = 100 000
of which 90% (dir+ indir) expenses in Belgium: 90 000
of which 70% direct expenses in Belgium: 63 000
The Tax Shelter CertificateEXAMPLE 1: Acquisition of a Certificate of 100 000 €
Advantages for the Investor
Sums to pay to the producer(for an optimal return): 48,387% 48 387
Tax exemption: 48 387 x 310% = 150 000
Tax saving: 150 000 x 33,99% = 50 990 50 990
Return on tax saving: 2 603 (5,37%)
Return on sums paid: 48 387 x (Euribor + 4,5%) x 18/12 (max)= 3 992 (5%/year)
The Tax Shelter Certificate
EXAMPLE 1: Acquisition of a Certificate of 100 000 €
Advantages for the Producer
Sums paid by the Investor: 48 387
To deduct: *return on sums paid (18 months): - 3 992
*intermediary fees: (ex: 10%): - 4 838
Netto Tax Shelter advantage: 39 557 (= 44% of Belgian expenses)
The Tax Shelter Certificate
EXAMPLE 2: Acquisition of a Certificate of 700 000 €
Qualifying expenses (direct + indirect) EEA: 1 000 000
Fiscal value of the TS Certificate = 70% of qualifying expenses EEA = 700 000
of which 90% (dir + indir) expenses in Belgium: 630 000
of which 70% direct expenses in Belgium: 441 000
The Tax Shelter Certificate
EXAMPLE 3 : idem example 2, but insufficient expenses in Belgium
fiscal value proportionnally reduced
If total expenses in Belgium (dir + ind) : 500 000 (instead of 630 000)
Fiscal value of the Tax Shelter Certificate =
500 000 x 10/9 = 555.555
If total expenses in Belgium (dir + ind) : 630 000
but direct expenses in Belgium: 400 000 (instead of 441 000)
Fiscal value of the Tax Shelter Certificate =
700 000 – (41 000 x 400 000/441 000) = 662 812
The Belgian eligible expenses
Production costs, operating costs and financial costs
▪ incurred during 18 months from state of signature of a framework agreement (24 M for animation films)
▪ which constitute taxable income in Belgium in name of beneficiary
The Belgian eligible expenses
70% min in expenses directly linked to the creative and technical production of the work
Examples
Wages, social security contributions, shooting costs,….. Charges as regards the equipment and other technical means Postproduction expenses 25% of the transport and accomodation costs Etc.,…
If taxable in Belgium eligible expenses
The Belgian eligible expenses
30% max in expenses not directly linked to the production
Examples
Administrative and financial costs, overhead costs Expenses as regards the assistance to the production Fees paid to intermediary companies 75% of the transport and accomodation costs Etc.,…
If taxable in Belgium eligible expenses
Coproduction
the best way is to first find a local producer
The Belgian Tax Shelter,
What’s in it for you as foreign producer?
Need to know more ?
Federal Public Service Finance Fiscal Department for Foreign Investments
Michela RitondoRue de la Loi, 24 (Parliament Corner)1000 BrusselsBELGIUM
• Email: [email protected]• Phone: +32 257 938 69• Fax: +32 257 951 12
