Revamped domestic French tax rebate scheme has reduced domestic runaway shoots
One of the main concerns underpinning France’s two-tier tax rebate scheme has been to reduce the number of French runaway shoots – i.e. domestic productions that relocate to Belgium, Luxembourg or Eastern Europe – while simultaneously increasing the number of international productions lensing in the country.
These twin objectives are intimately associated to a long-term policy of safeguarding France’s position as the key film production hub in Europe, with the full range of services to meet this goal – from sales companies to technical infrastructures.
The domestic tax rebate scheme was introduced in 2005 and a second scheme for international films, the Tax Rebate for International Production (TRIP), was introduced in 2009.
Although TRIP has attracted a rising number of productions, France’s runaway shoot trend persisted until late 2012, with a rising number of domestic films being shot abroad.
A technical industries report published by the French cinema agency, the CNC, in January 2013 revealed that due to the restrictive €1 million ($1.36 million) cap, the domestic tax rebate scheme had a minimal impact on more expensive French films – and as a result an astounding 69% of shooting days for films budgeted over $13.6 million were being lensed abroad.
One of the examples cited in the report was the $81.6 million “Asterix and Obelix: God Save Britannia,” that was shot entirely in Ireland, Hungary and Malta.
By late 2012, there was a consensus in France that both schemes needed to be revised.
The momentum for change was aided by the fact that the European Commission relented on its initial threat to rein back existing tax relief schemes and territorial shoot rules throughout Europe, and finally approved a new Cinema Communication in mid-2013.
French parliament approved changes to the twin tax rebate schemes in late 2012; the schemes were approved by the Commission in mid-2013.
In an attempt to halt French big-budget runaway shoots, the cap on the domestic scheme was upped to $5.44 million, while TRIP cap was increased first to $13.6 million and then to $27.2 million – in a clear sign that France means business when it comes to attracting foreign shoots.
Equally importantly, the range of eligible expenses has been widened.
The immediate results have been extremely encouraging in terms of bringing back French runaways.
According to CNC data disclosed in January 2014 total shooting days for French-initiative films were stable at 6,099 days in 2013, in comparison with 2012, but the breakdown has been very different, with a 17.8% decrease in shooting days abroad and an 8.5% increase in shooting days at home.
Remy Chevrin, prexy of the French Society of Cinematographers, AFC, views this as an important step, but isn’t complacent: “In 2013, we saw half of French runaway productions coming back to France, due to the increase in the cap on the tax rebate scheme and reinforced conditions in terms of studios and technicians – but we’re still in danger.”
“France has several key assets, including its industry, history and culture, but we also have handicaps, such as labor costs, and regulatory constraints on working hours,” suggests Thierry de Segonzac, president of the French technician’s union FICAM.