The tax shelter is a tax measure introduced by the federal state to support the Belgian film industry. This measure was introduced in 2003 to answer to the severe lack of funding that suffered the film industry in Belgium. Today, this measure provides attractive financial returns for companies, the state and especially for the film industrial

In 2010, Scope Invest, one of the leading companies on the market, suceed in presenting three films that exceed the one million entries, "Rien à déclarer" by Dany Boon, "Potiche" by François Ozon and "La chance de ma vie" by Nicolas Ozon.

Specifically, all Belgian companies, from SMEs to the BEL-20 companies can benefit from the mechanism of Tax Shelter (not active in the film sector)

The law provides that the benefits of Belgian resident company are exempt up to 150% of the amount actually invested by the company in the production of a film. [1] The amount the company can allocate to a tax shelter transaction each year is determined by the law, approximately one quarter of its profits before tax with a maximum of € 500,000 per year per company.

The tax benefit is 51% of the amount of the transaction tax shelter. Indeed, the amount of the transaction is 150% deductible for the company. Based on a normal tax rate of 33.9%, the operation results in an immediate tax reduction equivalent to 51% of the amount of the transaction. The tax is therefore more than half the amount of the transaction for the company.

There are several financial benefits for the company:

• Tax advantage: It is about 51% of the Amount of the transaction.
• The repayment of loans (40% of transaction amount) at the end of the film
• The loan interest: Can generate interest (depending on the Tax Shelter provider)
• The cash from the equity
  • Operating revenues: if the film allows, the company can receive revenues
  • Resale rights: the company decided to sell its rights to revenues (in accordance with certain legal requirements).

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The tax shelter is still a risky investment given the unpredictability of the film industry. We advise you to consider the following:

• Reputation, experience and financial health of the organism Tax Shelter
• Bank guarantee covered for the loan
• Ruling conditions validated by the tax administration

For more information, refer to the following sites:

• Scope invest: Mr Nobody, Le petit Nicolas, Rien à déclarer, Coco avant Chanel...
• Casa Kafka Pictures: Comme t’y es belle, Odette Toulemonde...
• uMedia: A bout pourtant...
• Tax Administration: tax shelter law

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