Teuton tax tactics

German pols want U.K.-ish rebate system

Germany’s state governors Thursday called for a film industry tax rebate system similar to the one recently introduced in Blighty rather than a re-hash of the tax haven film funds, or medienfonds, axed by the newly elected Teutonic federal government last year.

The medienfonds did not include a German spend clause, which meant that most of the money went into U.S. productions with little benefit to the local economy. Since their abolition, a federal government working group has been trying to develop a new tax shelter.

The working group has reportedly come up with two alternatives: Either a rebate model such as the British one, which would mainly benefit the production sector and provide producers with a 15%-20% tax rebate on their German spend; or a Film Investment Trust that would allow Teutonic fund managers to set up tax funds.

During Thursday’s meeting in Berlin, the Teutonic governors made it clear that they favor the rebate system. This will not please German cultural minister Bernd Neumann who favors the FIT model.

Neumann, who promised to come up with a proposal for a tax shelter for the film industry before parliament takes its summer break on July 7, will need the governors’ support to get his proposal through Germany’s upper house of parliament.

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