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Teutonic biz could get a tax break

Gov't proposal includes sale/leaseback plan

BERLIN — German producers on Wednesday got a helping hand from Chancellor Gerhard Schroeder, who has ordered a review of a new tax break proposal to entice investors to back local productions.

Review could lead to a boost in coin for Teutonic moviemakers, who until now have had to make do with Germany’s regional subsidies while major investment funds last year raised $1.7 billion for Hollywood productions.

Plan, pushed by German production lobby group Film 20 and federal Culture Minister Christina Weiss, would introduce a sale-and-leaseback scheme allowing producers to sell a film to investors and then lease it back. Investors would be able to write off their investment if at least 35% of a pic’s budget is spent on the local industry.

In addition, German tax-saving film funds, which are the darlings of Hollywood, are ready to allocate 10%-15% of investment capital to local productions.

The offer may insure their survival; they face criticism here for bankrolling the U.S. film industry with potential tax money. It also will add to the German film industry’s overall gain if the government does revamp film financing.

At his offices, close to the fest site, Schroeder met industryites, including Film 20’s Georgia Tornow, producers Stefan Arndt of X Filme, Jens Meurer of Egoli Tossell, Alexander Thies of NFP and media fund execs Andreas Schmid of VIP Medienfonds and David Groenewold of GFP.

The chancellor wants to set up a six-member committee of industry and government reps to review the plan and report back in three months — a surprisingly speedy timetable for the famously bureaucratic government.

Despite Finance Minister Hans Eichel’s concerns that the government cannot afford tax breaks in view of Germany’s dire economic state, Schroeder backs the plan.

The Teutonic industry has been bolstered by local box office hits like “Downfall,” “Good Bye, Lenin!” and hugely popular comedies that have overshadowed Hollywood blockbusters.

VIP’s Schmid told Daily Variety that a combo of sale-and-leaseback and money from German private funds would be a positive development, adding it would make sense for everyone to keep the two models alongside each other.

Roland Emmerich, jury prexy at the Berlinale, said any incentive would strengthen local film and improve Germany’s standing as a location for international productions.

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