Dutch scheme up in the air

Pic tax plan fails to follow new tax code

AMSTERDAM — More than 40 films have been financed in the Netherlands through the country’s widely publicized tax incentive scheme, including high-budget pics such as “Enigma” and “Hollywood Sign.” But the industry is biting its collective cuticles over the possibility that the money train may be headed for derailment.

The film tax plan failed to conform with Holland’s new tax code, which went into effect this year, and had to be grandfathered, albeit with tightened regulations, until the end of the year. The Dutch government has not yet made a decision on whether to continue with the scheme, but sources say it might be in favor of dropping the entire scheme.

Even producers who want to get in under the wire before year’s end are being stymied. The European Commission is looking at the new code, including the grandfathered film scheme, and if it doesn’t like what it sees, producers who started projects this year could be out in the cold.

“Few tax incentive projects are being materialized right now because of the very real danger that they might fall through,” notes Volkert Struycken, head of Get Reel Prods., whose pic “The Cave” was partially financed through the program.

Post-production in Holland has increased by 50% thanks to the tax scheme, but Michel Schopping, co-owner of post shop Klink, says the sector is wary of possible changes.

“There is plenty of work,” he says, “but if someone starts a facilities company and the tax scheme goes down the drain, they’ll be left holding the bag.”

Not everyone is seeing a bleak future, however. Arteco Film Financing — which has helped finance eight films for around $10 million euros ($8.85 million), including the latest George Sluizer vehicle, “The Stone Raft” — is working on its ninth film project under the tax program.

“We see the EC situation as a formality,” says Arteco’s Marc Noyons. “We have the feeling the government will continue the tax incentive program for at least another three years.”

THE MONEY

Tax incentive plan (CV): system of discretionary depreciation for investments in film; 50% of budget must come from Dutch sources

Dutch Film Fund: doles out $9 million annually to local films

Rotterdam Film Fund: $2 million in 2001 to Dutch and international co-productions; next year funding increases to $2.5 million

COBO matching funds: Dutch public TV sales contributions; often matched with Dutch Film Fund projects; approx. $4 million annually

SPECIALISTS

Banks and investment brokers: ABN-AMRO, Arteco (Marc Noyans/C-Sales), F. van Lanschot Bankiers, Mees Pearson (through Fintage House), Nationale Investerings Bank (Innocap)

Private investment advisors: Arteco (Mar Noyons/C-Sales); Metronome Prods. (Frans Afman)

Film investors Netherlands (FINE): Gamila Ylstra

NEW FILMS

“The Cave” (Get Reel Prods.); director, Martin Koolhoven; budget, $3 million

“The Discovery of Heaven” (Mulholland Pictures); director, Jeroen Krabbe; budget, $12.5 million

“Little Ashes” (Egmont Film & TV, Wanton Muse); director, Marleen Gorris; budget, $10 million

“The Red Siren” (Fu Works and Haut et Court); budget: $8 million; director, Olivier Magathon

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