To attract international film productions to France, the French National Assembly voted to increase to €10 million the amount of tax rebates that can be earned by filming in France. The new provision is hidden in Article 16 quinquies of the Amending Finance Bill for 2012, voted on December 11, 2012. Previously the amount of the total rebate was capped at €4 million. The new provision, if confirmed by the Senate and Constitutional Council, would allow qualifying international productions to spend up to €50 million in France and receive a 20% tax rebate for each euro spent on qualifying expenditures.
The French tax rebate system for foreign productions, which is in fact a tax credit claimed by a French line production company, has been around since 2009. The current system is described in full on the Film France site. Several criteria and points must be satisfied in order to benefit from the French tax credit, and the qualifying expenditures are limited. Once adopted, the new system may still need to be approved by the European Commission under state aid rules. The revised rules would significantly enhance the attractiveness of the French scheme:
- the cap for the tax rebate for non-French motion picture productions would be increased from € 4 million to € 10 million. For French productions, the cap will be increased from € 1 million to € 4 million ;
- new expenses such as transportation, hotels and catering costs, will be eligible for the credit.
These amendments will have to be confirmed by a decree before January 1, 2014. An uncertainty exists regarding the application of these new measures between the entry into force of the French Amending Finance Bill for 2012 and the publication of the decree.