Lux Tax Break Seeks To Land Film Bux

In December 1988, the Luxembourg government unveiled a tax scheme to stimulate production by native and foreign investors willing to produce all or part of their films in the Grand Duchy.

It was welcomed by the country’s fledgling filmmaking community, which had been lobbying for government support for quite some time.

“Audiovisual certificates” are granted for production moneys spent in Luxembourg. They offer relief of up to 30% of a taxpayer’s income. In the case of a foreign investor not having taxable income in Luxembourg, certificates are negotiable. They can be sold to banks, companies or even individuals.

To benefit from the scheme, production companies must either be registered in Luxembourg or co-produce with a Luxembourg-registered firm. Commercials, news and sports programs and videoclips are not eligible. Also, certain “moral” standards have to be met, thus ruling out gratuitous violence and pornography.

Getting the word out

To publicize these tax incentives, the Service des Medias et de l’Audiovisuel, established by the Luxembourg government with offices in Los Angeles and New York, got down to work. Although initially the law met with some skepticism, scores of productions finally found their way to Luxembourg in 1990.

Among these were “Dracula, The Series,” a 21-episode tv skein produced by Cinexus/Famous Players of Canada in association with RHI Entertainment; “Sherlock Holmes And The Leading Lady,” a tv movie produced by Harmony Gold of Los Angeles, starring Christopher Lee, Patrick MacNee and Morgan Fairchild and directed by Peter Sasby; “Warburg, A Man Of Influence,” a 3×90-minute miniseries produced by French Modfilm in association with tv web TF-1, directed by Moshe Mizrahi and starring Sam Waterston, Alexandra Stewart, Julian Glover, Dominique Sanda and Jean-Pierre Cassel; and “Coins In A Fountain,” a Michael Filerman production in association with JE/RTL and Koenigsberg/Sanitsky.

Also, “Retrato de Familia” (Family Portrait), a Spanish-Portuguese-Luxembourg feature film co-production, directed by Louis Galvao Teles and starring Maria de Medeiros and Joaquim de Almeida; “The White Camel,” a 50-minute animation feature produced by Luxembourg-based 352 Prods.; “Ex And Hopp,” produced by Frankfurter Filmproduktion of Germany for ZDF, directed by Andy Bausch and starring Mario Adorf and Desiree Nosbusch; “Schwere Erbschaft,” an episode of tv serial “Jolly Joker,” produced by LFP (of Luxembourg) and German Bavaria Prods, for ARD television; “De Falschen Hond,” an RTL-Hei Elie (Luxembourg) tv feature production; and “Schacko Klak,” a 90-minute feature film produced by Samsa Films of Luxembourg.

On-the-job training

According to official channels, there’s a lot more to come in 1991, including major Luxembourg and international feature-film productions and co-productions, plus French tv series “Le Chinois,” to be produced by Initial Groupe of Paris.

The new law has had an immediate impact on the young Luxembourg filmmaking community (the Grand Duchy’s first feature film was produced in 1981), giving many of the country’s talent the opportunity to learn their craft while working as assistants on new local productions. However, attracting foreign productions to the country without giving incentives to native talent to make their own films drew some criticism. Therefore, last year the government voted the Fonds de Boutien a l’Audiovisuel (Luxembourg Film Fund), a program that in its first year allocated a total of 30 million Luxembourg francs ($1 million) to 12 productions.

These moneys are reimbursable if a film turns a profit and are allocated annually by a board of six appointed governors, who thus subsidize feature and documentary production or co-production. Funds are also given for project and screenplay development. Projects are evaluated twice a year, with the board of governors judging the quality of screenplays and the creative viability of projects.

Funds were allocated for the first time in December 1990. Among the features supported were “Three Shake-A-Leg Steps To Heaven,” to be co-produced by Phenix Prods. ($325,000), “Dammentour,” to be produced by AFO Films ($240,000), and the Spanish- Portuguese-Luxembourg co-prod “Retrato de Familia” ($85,000). Coin was also given for the development of several screenplays, documentaries and short subjects.

Lack of facilities

One point made by foreign producers and native talent alike is the lack of studio facilities in the Grand Duchy. Since camera and lighting-equipment firms are planning to set up shop in Luxembourg, the construction of appropriate studio facilities ought to be on the government’s top-priority agenda. However, though one or two projects are rumored to be in development, no specific plans have been made public.

Working space needed

Naturally, studio facilities would be welcomed by native craftspeople who are desperately in need of working space.

The tax incentive law is due to expire in 1992, but discussions are under way to extend the law beyond that date, especially if investors in studio facilities can be found.

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