French law provides various tax incentives for cultural industries, including tax credits for audiovisual and cinema activities and for the recorded music sector when producing developing artists. In the framework of the Finance Law 2016, a new tax credit has been adopted for live music and variety shows (Article 220quindecies of the Tax Code).

Eligible companies and artists

The new tax credit benefits live entertainment companies, as defined under Article L7122-2 of the Labour Code. In France, such companies must hold an administrative licence to carry out this business activity.

To be eligible for the tax credit, the company can be established in France, another EU member state or another member state of the European Economic Area (Norway, Iceland or Lichtenstein), but must be subject to French corporate tax. It must also be the employer of the artistic stage and bear the creation costs of the show – costs which should primarily be incurred in France. The show may nevertheless take place in France or any of the abovementioned European states.

Eligible artists and groups of artists are those for whom no show in which they have participated has recorded more than 12,000 paying visitors during the three preceding years (except festivals or the opening part of a show). In the coming months the French tax authorities will comment on the new regime and provide their interpretation of the threshold, which at first sight seems generous.

Eligible expenses and amount of tax credit

The concerned expenses must be taken into account in the company's French taxable income. Eligible costs are expenditure charges for the creation, exploitation and digitalisation of the show as enumerated by law. These costs are broadly defined; they include (but are not limited to):

  • salary costs for permanent employees, artists (up to five times the social collective agreement minimum) and technicians involved with the show;
  • author rights costs and fees for certain service providers (eg, graphic artists, costume designers and stage directors);
  • rental fees for theatres and rehearsal rooms, rental fees and repair costs for equipment used in the show, insurance costs, transportation costs, and restaurant and hotel costs (up to a maximum to be settled by decree within the limit of €270 a night);
  • marketing and promotional expenses, including for artist websites and artist participation in television programmes; and
  • expenses incurred for the digitalisation of the show.

Expenses claimed for the live music show tax credit cannot also be claimed for the recorded music tax credit.

Public subsidies and tour support subsidies paid by recorded music producers which relate to eligible expenses should be deducted from the tax credit base.

The tax credit rate is 15% of eligible expenses. However, the rate increases to 30% for companies qualifying as small or medium-sized enterprises, as defined in EU Regulation 651/2014. Under this definition, the enterprise must employ less than 250 associates and have total balance-sheet assets of less than €43 million or a turnover of less than €50 million. In company groups, these thresholds usually apply to the group as a whole. Forthcoming administrative comments are expected to confirm whether this will be the case for the new tax credit.

The maximum amount of eligible expenditure is €500,000 per show. The tax credit itself is capped at €750,000 per company per year. If the tax credit exceeds the corporate tax on which it is offsettable, the difference is refundable.

Conditions and entry into force

The tax credit is conditioned on the double approval of the Ministry of Culture. The first approval, granted on a provisional basis, must be requested before the relevant expenditure is made. Such approval is granted provided that the company fulfils all of its legal, social and fiscal obligations. The second approval must be obtained within 42 months of the provisional approval, failing which the enterprise will have to reimburse the obtained tax credit.

The tax credit regime is meant to accord with Article 53 of EU Regulation 651/2014 declaring certain categories of aid compatible with the EU internal market (ie, in practice, no prior authoriation from the European Commission is required before implementation).

The new tax credit came into effect with the Finance Law 2016, and should in practice apply to charges incurred as of January 1 2016. However, its effective application will depend on the adoption of a government decree required to settle details relating to the conditions of ministerial approval as well as to the operation of an expert committee that will render advice on provisional approvals.

For further information on this topic please contact Sylvie Canonge at Nomos by email ( or telephone (+33 01 43 18 55 00). The Nomos website can be accessed at

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