PARIS– After over a year of intense lobbying, Belgium’s indie producers have finally succeeded in getting their government to approve a reform of the country’s tax shelter.

The reform, which has yet to be approved by the Parliament and the European Commission, aims at restructuring the tax shelter to level the playing field for all Belgium-based producers, as well as limit investors’ recoupment options and make the system more transparent.

Even thought the shelter appears more restrictive in regards to the investors’ role, it has been warmly welcomed by international and local industryites because it’s opening up the tax shelter to all international co-productions, even those which are not led-produced by a European company.

The controversial aspect of the new shelter lies in the fact that it will not allow investors to take rights linked to the exploitation of films.

The Belgian incentive requires intermediaries (Belgium-based co-producers) to get one or more investors on board in order to raise up to 50% of the production budget, which usually comes in the form of a loan. However, with the exception of a few heavyweight players like UMedia, local producers argued the system benefited the investors while in many cases, only a small portion of the money raised actually went into the films’ production budget.

Under the existing tax shelter, introduced in 2003, producers had to return 40% of that loan amount to the investor; and investors bought rights in the pic’s commercial exploitation with the remaining 60%.  Investors then arranged a “put option” to sell back their rights after a certain period to avoid waiting for the production to make money, according to Screen Flanders.

The tax shelter brought in estimates that from 2003 to 2011 the system channelled over €600 million into films and other audiovisual works between 2003 and 2011, according to the Finance Ministry. Recent films that tapped into the Belgian tax shelter include Olivier Dahan’s “Grace of Monaco,” the Nicole Kidman-starrer that’s set to open Cannes Film Festival.

Andre Logie, producer at one Belgium’s leading arthouse outfits, Panache Prods., said the changes will prevent a handful of deep-pocketed producers from using the tax shelter in excess to position themselves on nearly every every high-profile international project.

If passed by the Paliement and E.U., the reform will be implemented by the end of the year.