Belgium treads red carpet

New tax program spawns a clutch of Croisette titles

A small contingent of Belgian businesspeople will be treading the red carpet to the out of competition screening of Christian Caron’s “Joyeux Noel” at Cannes.

They belong to a group of 15 investors who put S1.8 million ($2.3 million) into the WWI drama, roughly 10% of the budget, through Belgium’s fledgling tax shelter.

“They’ve already been on the phone to make sure I reserve them tickets,” comments Brussels-based producer Patrick Quinet, of Artemis Prods., on the day the Cannes lineup was announced.

“The scheme has enabled Belgian producers to participate in co-productions in a way that wouldn’t have been possible before. We couldn’t have come up with $2.3 million without it. It’s taken us to another level,” he says.

Artemis also tapped the shelter for Israeli Amos Gitai’s Natalie Portman-starring, competition screener “Free Zone,” which resulted in part of the post-production on the pic being done in Belgium.

After a false start in 2003, the tax shelter has taken off over the past 12 months with impressive results. More than 20 productions have raised $19.5 million through the initiative.

Early attempts to use the mechanism for productions such as the octogenarian tragicomedy “Sweet Jam” and the coming-of-age tale “The Kiss” revealed its flaws.

Sticking points included the temporary nature of the relief and that companies with links to a TV channel, even through a parent group, were barred. After much lobbying, the Belgian Parliament passed an amended law in May 2004.

“The producers who put the shelter together were not accountants. Finance directors at major companies told us it was unworkable,” says Genevieve Lemal, of tax shelter intermediary Scopeinvest, which handled “Sweet Jam” and “Joyeux Noel.”

Scopeinvest has since helped finance other Cannes titles “The Child” and “Nord este” as well as Costa Gavras’ “The Ax.” It is currently working on Rachid Bouchareb’s “Indigenes.” Possible future projects include Paul Verhoeven’s “Black Book,” and pics by Jaco Van Dormael and Benoit Mariage.

Elsewhere, rival intermediary Marmont Film Financing has just raised $5.2 million for Dutch Ben Sombogaart’s time-travel children’s movie “Crusade.” Half that sum will come from four subsidiaries of local publishing and broadcasting giant the Roularta Media Group.

The company made a high-profile announcement of the film’s impending shoot in April. “We want to raise awareness regarding the tax scheme and get through to potential investors that the initial problems have been resolved,” explained MMF chief Michel Houdmont.

Some local producers prefer to access the mechanism directly. Prolific Flemish production house MMG did a test run last year with Dominique Deruddere’s “The Wedding Party,” raising 5% of the $8.7 million budget.

It will be relying more heavily on the program for “Storm Force,” a feature version of a popular local TV series about a search and rescue helicopter squad, and “Dossier K,” a sequel to home-grown box office smash hit “The Alzheimer Case.”

Despite the new finance, the mood within the Belgian film industry is mixed.

In Flanders, the combination of the shelter and an overhauled Flanders Film Fund, with an annual outlay of $15.6 million, has invigorated a filmmaking community long-neglected by public bodies.

On top of this, a handful of pics such as “The Alzheimer Case,” “Team Spirit II,” “The Kiss” and “The Intruder” have done well at the local box office.

“I think it’s partly a case of ‘New brooms sweep clean,’ but I think there is a definite sense within the Flemish industry that things are moving,” says film fund spokesman Christian De Schutter.

The atmosphere within the French-speaking community is less buoyant. “Overall the situation isn’t as bad as before but state funding remains low,” says Quinet.

Direct funding from the state-backed Cinema and Audiovisual Center has remained at $10.4 million for last three years. Francophone producers also can turn to regional fund Wallimage and local broadcasters such as RTL-TVI.

The Francophone Film Producers Union is lobbying for an increase of $5.2 million in direct state funding over the next three years.

Beyond this, France’s introduction of the “credit d’impots” mechanism, which gives a 20% tax break on up to $6.5 million of production costs incurred in France, has resulted in Franco-Belgian co-productions falling to 10 in 2004 from 24 in 2003. “We plan to meet our Belgian counterparts to discuss the issue and will take it from there,” says Quinet.