Proposition 51K0730

Projet de loi modifiant l'article 194ter du Code des impôts sur les revenus 1992 relatif au régime de tax shelter pour la production audiovisuelle.

General information ¶

Authors

MR Pierre-Yves Jeholet, Philippe Monfils
Open Vld Hendrik Daems, Stef Goris
PS | SP Valérie Déom, Alain Mathot
Vooruit Anne-Marie Baeke, Annemie Roppe

Submission date

Jan. 22, 2004

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

audiovisual industry audiovisual production direct tax television corporation tax tax-free allowance profit

Voting ¶

Voted to adopt

CD&V Vooruit Ecolo LE PS | SP Open Vld N-VA MR FN VB

Contact form ¶

Do you have a question or request regarding this proposition? Select the most appropriate option for your request and I will get back to you shortly.

Discussion ¶

April 1, 2004 | Plenary session (Chamber of representatives)

Full source

I have the honour to report on the Bill No. 51/730 amending Article 194ter of the Income Tax Code 1992 concerning the tax shelter scheme in favor of audiovisual production.

The proposal aims to improve the tax shelter arrangement agreed in the Program Act for audiovisual production on three points. The scope will be expanded by allowing more companies to benefit from the measure. The totality of the investments shall be deductible instead of only a part thereof and the year during which the investments will be taxally deductible shall be indicated.

On the original bill, a number of amendments were submitted which were of a purely fiscal-technical nature. These amendments were submitted relatively late. There was a lot of discussion about this, but ultimately a consensus was reached and it is decided not to delay the draft because the sector is very quickly asking for this.

Two elements of a substantive nature were added in the form of an amendment. First, in the future, companies affiliated with audiovisual companies will also need to be able to enjoy the social benefit. Second, the scheme is extended to the long fiction film for television. However, this still requires an agreement within the sector, which falls within the competence of the Communities and Regions. This amendment will therefore enter into force only later, namely by 1 January 2006.

The bill was unanimously adopted by the Finance Committee.

I would like to thank Mr Tommelein for his report.

I now give the floor to Mr. And then, and then, to Mr. Goris and Mr. Mathot in the general discussion. I am changing languages, which I am very attached to.

Mr. Speaker, Mr. Minister, dear colleagues, thanks to the persistence of a colleague who was present just recently – Philippe Monfils – but also of the Minister of Finance, the tax shelter was created in Belgium.

As a reminder, this proposal aims to refine the tax shelter system already in place. The tax shelter is a tax incentive designed to encourage Belgian and foreign companies to invest in the production of licensed audiovisual art.

Concretely, this proposal incorporates the amendments to the tax shelter arrangement of the draft law-programme that had been submitted at the request of our group. In the absence of agreement last December, these amendments had been withdrawn at the request of the Minister of Finance, being understood that he agreed to review them in the form of a separate proposal.

The proposal includes these amendments, namely: 1. the exclusion of the benefit from the provisions of the tax shelter targeting companies linked to broadcasters is removed; 2. the tax advantage must be obtainable at the time of the signing of the framework agreement, at the time of the commitment to pay the amounts and not at the actual payment; The period for issuing the expenditure certificate in Belgium is increased from 2 to 5 years with the key, at the end of this period, a definitive character of tax immunity.

The MR is also pleased that, at its request, the extension of the scope to long fiction television films has finally been accepted. We have, in fact, extended the benefit of the provisions of the er tax shelter to long-term television films no later than 1 January 2006, unless a royal decree deliberated in the Council of Ministers has previously consented to do so. In this regard, I think I can confirm the interest that this extension of the tax shelter regime arouses on both the French-speaking and the Dutch-speaking side.

In conclusion, Mr. Speaker, we can hope that the enlargement, the security provided and the clarification of the tax shelter regime today will enable us to ⁇ the objective we pursue, namely to help the audiovisual sector in the broad sense: investors, producers, authors, actors, actors, actors but also all technicians and people who have any relationship with the audiovisual sector. Today it is about giving a clear and reassuring message to this sector which also deserves our full attention.

Mr. Speaker, Mr. Minister, Ladies and Gentlemen, I would like to begin by thanking a few people for the preparation of this bill.

First, I would like to thank the colleagues of the majority, with whom we have worked very constructively. We spent many afternoons on that dossier, consulting with the sector and with all stakeholders. That didn’t always run from a loose roof, because sometimes the interests were conflicting, as we have identified, and we had to apply pendulum diplomacy between the different parts of the sector to eventually come to a result that is satisfying for everyone and especially everyone gives perspective. That has taken a lot of time, but that is of course our job as a people’s representative. That bill was strictly taken purely prepared, submitted and prepared by our colleagues of the majority. I want to thank them for all that effort and for the result that eventually came to be achieved.

I am also grateful to the Minister, who, though, has fallen a little to the side line, because, as I just said, the initiative came mainly from colleagues from Parliament. Nevertheless, the Minister provided us with the necessary advice and action to ensure that we would not fall into technical problems. I also thank the minister responsible for the budget, who ultimately agreed to get those fiscal favorable measures on paper. If we do this, the budget must of course also be available for this. This confirmation was of course very important to us.

I would also like to address my fellow members of the minority. They also contributed their stone. We have finally reached the point of unanimously approving that bill, even though we had submitted a number of amendments at the last moment. In fact, it took so long before an agreement was reached with the sector — within the majority that was less a problem — and until we had all the points and commas exactly on paper. In particular, I would like to thank the members of the opposition for their patience in this matter.

Ladies and gentlemen, a little about this. You know that we had already approved a similar scheme within the Program Act of late 2003, but that ultimately there proved to be insufficient interest in the tax shelter scheme itself. One of the reasons was, among other things, that the advantage was not finally acquired because it had to be reinvested. This resulted in insufficient attractiveness.

The second point was the exclusion of the companies associated with the television broadcasters. It seemed appropriate for us to make some corrections in this regard. This has happened with this.

We immediately added a number of elements. Very important was, especially for the VLD faction, the addition of the long fiction film for television, among which we mean a film that lasts longer than 52 minutes and which stands on its own or is part of a series or of a feuilleton. The Flemish film industry can also be very important in this regard, because there is a tradition in it and because there is a great need to obtain additional support through that fiscal measure.

However, the measure for the long fiction film will not enter into force until 1 January 2006, unless the Council of Ministers approves a royal decree with an earlier date of entry into force. This is so arranged because it is intended that an appropriate framework is developed to ensure that especially the Flemish, respectively French-speaking actors and directors can maximize the enjoyment and participation in attracting external capital and external investment. That framework must still be on paper because that guarantee must surely remain. This, of course, requires some consultation with the Regions and the Communities. We therefore ask the government to work on this as soon as possible and to pour it into the royal decree that we expect.

There is a ceiling of 750,000 euros and the exemption is 150%. It was also immediately requested — which was also emphasized in the committee and was explicitly included in the report — to remove the ceiling of the short or medium-term exemption, in order to give opportunities to really large productions as well. It also called for the lifting of the exemption from 150% to 175%. This is also in the pipeline. We hope that soon, after an initial evaluation, we will be able to come to these additional measures.

Another delicate element in the whole story is the agreement of the European Commission, let’s be honest. The European Commission has yet to give its formal approval. We have a first, informal confirmation that she has no problem with our tax shelter scheme, which, by the way, has already been accepted for other European countries. We address the Speaker of the Chamber to formally notify the proposal to the European Commission as soon as possible and with the necessary urgency and to call for an urgent decision. Together with you, we hope that there will be no objections.

By the way, I have already informally heard from a number of sources in Canada, where the scheme exists, that there is a great interest in investing in a number of important productions, which they want to realize in our country. Experience in Canada and other countries teaches us that this fiscal aid measure was accompanied by significant economic and fiscal return effects. This is of course what we also have to do. It is about a lot of employment and about revenue effects. Through this measure we can attract external, new capital for the audiovisual sector in our country. Therefore, we will with conviction approve the bill.

First of all, I would like to join my colleague, Mr. Goris, to thank everyone for the work done. It is true that this was quite tough, we had to negotiate often and for a long time. I also thank the Minister of Finance and the Minister of Budget for allowing the amendments that have been made.

The proposal we are discussing today is undoubtedly an extremely important step forward for Belgian cinema. For more than two years, the film industry has benefited from a special tax regime better known as tax shelter. On the proposal of the government, the law establishing the tax shelter has been modified several times and, despite all these changes, the enthusiasm for the tax shelter has remained very limited. The contacts that Parliament has entered into with representatives of the sector have helped to identify the essential shortcomings in the existing law. With this bill, we try to make the necessary changes to fill these gaps.

The tax shelter is a tax regime that offers companies tax exemption from profits invested in a film production. The conclusion underlying this proposal is simple: film production is a risky business. Therefore, in order to support the sustainable development of our cinema, it is necessary to reduce as much as possible the commercial risk associated with the placing on the market of a cinematographic work. In Belgium, despite the high quality of our film production, only 20% of the films produced turn into commercial successes. The risk for an investor is therefore often excessive, which brakes potential investments. It was therefore urgent to provide Belgium with a preferential fiscal framework to reduce this important risk, especially since this system is already well established in our European neighbors, sometimes culturally very close, and therefore in direct competition with domestic producers.

Indeed, the growth that the Belgian cinema is currently experiencing was conducive to this kind of investment. It was obviously necessary that the tax shelter would be possible. That is why we have decided and tried – and I believe we have achieved – to elaborate this bill. This proposal aims to improve the tax shelter regime for audiovisual production, essentially on four points that I will briefly recall.

First, extend the possibility of benefiting from the tax shelter to companies linked to broadcasters. There was, indeed, a problem, since some companies which did not necessarily engage in broadcasting but which had as shareholder a company or a person who itself engaged in production, could not do so as such. This hides a whole bunch of companies that could invest.

Secondly, it is also proposed that the signing of the framework agreement, and therefore the formal commitment to participate in the financing of the audiovisual work, may already lead to the obtaining of the tax advantage.

Third, it is also proposed that the tax immunity provided for by law obtain a definitive character, according to the current tax regime. Investors are granted temporary tax immunity. Therefore, thanks to this law and thanks essentially to the Minister of Budget, the final character will be granted to the investor.

Finally, a lot of negotiations would have taken place to reach this fourth point. We have decided, in agreement with the industry, to extend the scope of the bill to fiction films for television and long films. As you know, the tax shelter system in its current form applies to fiction, documentary, and animation long films. However, the contacts with the industry showed that long-telefilms could have a structuring effect on the film industry and that it was therefore clear that special attention should be paid to them. However, it also appeared that the specificities related to the production of long-telefilms could not necessarily coincide with the tax shelter regime as imagined in Belgium.

We therefore agreed with the industry to extend the application of the law to long television films on the condition of a strict framework. The sector as a whole has committed to initiating a reflection on this point that will have to lead to concrete proposals. I draw the attention of members of parliament and government on the potential derivatives of an opening of the tax shelter to long-film television without a revision of the law. Any abuse in this area would endanger the entire tax shelter system. We will be very attentive to this extension of the scope.

Here are the most important changes, four. I know that some people were looking forward to them and now have the opportunity to work. We hope that these changes will allow the expansion of the tax shelter and actually the real beginning of the tax shelter.

I would also like to recall that during committee discussions it was agreed that the government should evaluate this scheme in a timely manner with a view to a possible increase in investment ceilings and taking into account private investments. We even agreed with my colleague Stef Goris to imagine a tax shelter in other fields of application.

Furthermore, this new tax system must also receive the approval of the European Commission. During the preparation of this bill, positive contacts have taken place with the Commission services. However, it is obviously essential to obtain a formal decision from the European Commission. In addition to the official notification to the European Commission, I will be grateful to the Chairman of the Chamber for applying for an authorisation of the tax shelter scheme for a minimum period of four years, i.e. until December 2007. The current authorisation is valid until December 2004. At the time of the initial notification, the Commission did not intend to grant a longer authorisation because a revision of the criteria for the authorisation of state aid in the cultural field was to take place in 2004. The Commission attempted to revise the criteria in January but, in the face of unanimous rejection by Member States, the current criteria were extended until 2007. In the notification to the Commission of tax shelter-like schemes, France and Ireland obtained an authorisation valid for six years. In view of the principle of fair treatment of the Member States, it seems to me that Belgium is entitled to request that the prior authorisation be extended until at least 2007.

Mr. Speaker, it has rarely occurred during my brief experience here that so many constructive words and thanks have been expressed for the cooperation that preceded a bill. I am therefore very pleased that I have been able to sign this proposal on behalf of spirit, in the interest of the creative economy. I am convinced that both the Flemish and Walloon film industry will be able to do this.

Mr. Speaker, Mr. Minister, I will not return to the various improvements to the tax shelter regime that make up this bill in draft. My colleagues have done this abundantly. I simply wanted to say that Ecolo is delighted with these different improvements, that they also fit into the different demands of the sector with which we have been able to work with confidence. The changes bring a better modus operandi of the tax system.

It is important to support the film sector both in its artistic and economic dimension. In addition, this sector is a real showcase of Belgium abroad. Therefore, it is without hesitation that Ecolo MEPs will support the bill.