} FOX AND HARE, DIR. TOM VAN GESTEL, MASCHA HALBERSTAD, BE CO-PROD. WALKING THE DOG
SCREEN FLANDERS ECONOMIC FUND
CO-PRODUCTION GUIDE
With an annual budget of 4.5 million EUR, the Screen Flanders Economic Fund offers support to audiovisual productions and co-productions that spend all or part of their budget within the Flanders region. The budget of the fund is provided by Flanders Innovation & Entrepreneurship (Agentschap Innoveren & Ondernemen). The Flanders Audiovisual Fund (VAF) manages the applications and promotes the fund. Belgian producers can apply to receive up to 400,000 EUR of refundable advances as an economic support to cover their audiovisual expenses in the Flanders region. Every euro invested in a production by Screen Flanders must yield at least one euro of audiovisual expenditure in the region. Financing of up to 15% of the eligible costs in Flanders is possible to a maximum of 400,000 EUR. The support is awarded in the form of refundable advances on net receipts. From these net receipts, a percentage needs to be repaid corresponding to the proportion of total support awarded by Screen Flanders in the overall financing of the audiovisual work. The Fund is entitled to this percentage even if the advance has been repaid. Periodical calls are made, each with a specific budget. Applications are presented to a jury consisting of both economic and cultural experts who assess and prioritise all projects based on qualitative and quantitative criteria. These criteria focus mainly on the economic potential of the project and the impact of the production on the Flemish audiovisual industry. Available funding is then allocated to the highest-ranking applications in descending order until the allocation is exhausted.
} I KILL GIANTS, DIR. ANDERS WALTER, BE CO-PROD. UMEDIA
WHAT KIND OF PROJECTS QUALIFY FOR SUPPORT?
}
Fiction features with a minimum length of 60 minutes can apply for support. Documentary and animated features (min. 60 min.) and series may also apply for support. Fiction series spread over multiple episodes are only eligible if they involve an international co-production in which the total Belgian share stated in the co-production contract is less than 50%. To be eligible, at least 50% of the financing of the overall production budget needs to have been secured at the time of application and the producer needs to spend a minimum of 250,000 EUR on eligible costs in the Flanders region. Furthermore, the project must enrich the cultural heritage of Flanders (the cultural test).
WHAT QUALIFIES AS AUDIOVISUAL EXPENDITURE?
}
Only certain types of expenditure are eligible when it comes to assessing how much support a project might be awarded. These expenses: • must be invoiced by a VAT paying company that has its operating headquarters in the Flanders Region; • must be made with the aim of completing the audiovisual work in question; • and must benefit the structure of the Flemish audiovisual industry.
Expenditure qualifying for support is exclusive of VAT and may not have been invoiced for at the time of application. It must be realistic and in line with market rates. }
HOW TO APPLY?
Applications must be submitted by Belgium-based producers. Foreign producers must work with a Belgian co-producer that meets all conditions. Screen Flanders applications can only be made in response to a call. Screen Flanders has three calls a year with deadlines on 9 March, 7 September and 30 November. Information regarding the exact deadlines can be consulted on screenflanders.com. }
OTHER INCENTIVES
Screen Flanders support is easily combined with other mechanisms such as the Belgian Tax Shelter (see pages 2629) and the Flanders Audiovisual Fund (VAF), (see page 30). }
CO-PRODUCERS
For foreign producers interested in accessing Screen Flanders support, the best and easiest way to find a local producer is through the producers’ associations (see page 31). Visit screenflanders.com for the full set of rules and regulations.
}
CONTACT
SCREEN FLANDERS FUND Jan Roekens E jroekens@vaf.be SCREEN FLANDERS FILM COMMISSION Katrien Maes E kmaes@vaf.be FLANDERS FILM HOUSE Bischoffsheimlaan 38 1000 Brussels - Belgium T +32 2 226 0630 W screenflanders.com
} THE MUTE, DIR. BARTEK KONOPKA, BE CO-PROD. EARLYBIRDS FILMS
S C R E E N F L A N D E R S | 25
BELGIAN TAX SHELTER The Belgian Tax Shelter is an efficient and transparent government-approved tax incentive designed to encourage the production of audiovisual works in Belgium. The system is open to Belgian productions as well as to qualifying international (mainly European) co-productions with Belgium. It is a win-win-win situation for the three parties involved: the producer is offered a very attractive way to finance projects; the investor obtains tax exemption through a virtually risk-free investment; and the Belgian state benefits from increased economic activity and spend. The first and necessary step for any foreign producer who wants to benefit from the Tax Shelter is to find a local co-production partner (see page 31).
BELGIAN PRODUCER Sells Tax Shelter Certificates based on the eligible direct and indirect AV costs in EEA & Belgium
Optimal cash investment of 48.315% of the Tax Shelter Certificate value
Intermediary (not mandatory) charges a fee
interest on investment (Euribor + 4.5%) x 18/12
Eligible AV direct and indirect costs in Belgium = 90% of the Tax Shelter Certificate value
FEDERAL MINISTRY OF FINANCE
BELGIAN INVESTOR Tax benefits based on the final Tax Shelter Certificate value = audited Belgian AV expenditure
} PLOEY – YOU NEVER FLY ALONE, DIR. ÁRNI ÓLAFUR ÁSGEIRSSON & IVES AGEMANS, BE CO-PROD. CYBORN
WHAT KIND OF PRODUCTIONS QUALIFY FOR TAX SHELTER?
}
Animation, documentary and fiction features, medium-length and short films qualify for the system as well as series, telefilms and TV documentaries. The audiovisual work must be approved by the competent departments of the Flemish, French or German-speaking communities of Belgium as a European audiovisual work: • as defined by the Audiovisual Media Services (AMS) Directive of 10/03/2010 (2010/13/EU); • or produced within the framework of a bilateral coproduction agreement concluded between Belgium (or one of its communities) and another state. There are currently bilateral co-production agreements with Israel, Canada and Tunisia.
} LILY THE WITCH SAVES CHRISTMAS, DIR. FLORIAN BAXMEYER, BE CO-PROD. POTEMKINO
}
HOW DOES IT WORK?
Based on the amount of direct and indirect qualifying audiovisual costs the production will spend in the European Economic Area, a producer can sell Tax Shelter Certificates to investors. The total value of the Tax Shelter Certificates may amount to a maximum of 70% of the direct and
indirect qualifying audiovisual costs incurred in the European Economic Area, insofar as these expenses are specifically related to the production of the audiovisual work. The value of all the Tax Shelter Certificates sold for one audiovisual work may not exceed 15 million EUR. A minimum of 90% of the Tax Shelter Certificate’s value needs to be spent in Belgium on qualifying audiovisual costs, of which a minimum of 70% needs to be directly related to the production and exploitation of the audiovisual work. This refers to costs related to the creative and technical production and post-production of the audiovisual work. Costs related to the administration and financial management of the audiovisual work do not qualify as audiovisual spend and can only be taken into account to a maximum of 30% of the required expenditure in Belgium. In order to achieve an optimal return on investment, the investor will purchase the Tax Shelter Certificate for 48.315% of its audiovisual expenditure value. In return for purchasing the Tax Shelter Certificate, the investor benefits from a temporary exemption of any retained taxable profits worth up to 356% of the sum paid for the Certificate. The investors also receive interest on the sums paid to the producer; the applied rate is based on the Euribor 12-months rate augmented with 450 basis points. Investors can be approached directly by certified producers to arrange investment under the Tax Shelter, which will involve some legal work. An alternative is for the producer to work with an intermediary company certified by the Belgian authorities. The intermediary will match potential investors with productions and handle all the paperwork. In return for these services, the intermediary charges a fee to the producer. As well as specialised intermediary companies, the major Belgian banks have created film funds or investment products to bring the advantage of the Tax Shelter to those of their clients who want to invest. Once the audiovisual work has been completed, the Ministry of Finance delivers the final Tax Shelter Certificate based upon the audited expenditure. The final tax exemption for the investors may then be recalculated: if at the end of the production the required spend is not fully met, the value of the Tax Shelter Certificate will be reduced pro rata with the qualifying expenditure in Belgium at a level of 10/9.
B E L G I A N T A X S H E L T E R | 27
}
CASH FLOW & TIMING
The investors must make full payment within three months of signing the framework agreement. The investors thus pre-finance the production and/or post-production costs by purchasing a temporary tax exemption. The producer must make the qualifying expenditure within 18 months of signing the framework agreement. For animated features, the maximum term is 24 months after signing the framework agreement.
WHAT’S THE ADVANTAGE FOR THE PRODUCER?
}
If we take the example of a production with a 2 million EUR direct and indirect qualifying audiovisual spend in the European Economic Area, this means that Tax Shelter Certificates can be sold to a total value of 70% - in this case 1,400,000 EUR. 90% of this expenditure (1,260,000 EUR) needs to be spent in Belgium on qualifying audiovisual costs, of which a minimum of 70% (882,000 EUR) needs to be directly related to the production, post-production of the audiovisual work.
To acquire the optimal investment rate (48.315%), the investors buy the Certificates with a total value of 1,400,000 EUR of qualifying expenditure for an amount of 676,410 EUR. In order to find potential investors and deal with the framework agreement and legal documents, a producer may hire the services of an intermediary company. In return for its services, the intermediary will charge a fee, in this example 15% or 101,461 EUR. In addition to a tax benefit, the investor also earns interest on the sums paid to the producer. The interest percentage is defined by the Euribor interest rate (in this example -0.174% over 12 months) augmented with 450 basis points x 18 months/12, in this case 43,892 EUR. The net advantage of the Tax Shelter Certificate for the producer comes to 676,410 EUR - 101,461 EUR (commission) 43,892 EUR (interest) = 531,057 EUR = 42% of the qualifying audiovisual spend in Belgium.
} THE NIGHT DAD BROUGHT US HOME, DIR. STEFFAN STRANDBERG, BE CO-PROD. WALKING THE DOG
} IRON SKY: THE COMING RACE, DIR. TIMO VUORENSOLA, BE CO-PROD. POTEMKINO
}
WHAT’S THE ADVANTAGE FOR THE PRODUCER? 48.315% optimal investment rate
2,000,000 EUR Direct & indirect qualifying AV costs in the EEA
676,410 EUR Cash investment based on the Tax Shelter Certificate value
70% Interest on investment (Euribor*** +4.5%) x 18/12 = 43,892 EUR
Tax Shelter Certificate 1,400,000 EUR*
=
90% 1,260,000 EUR 90% spent in Belgium on qualifying AV costs
Min. 70% 882,000 EUR Min. 70% spent on direct AV costs
Commission intermediary** f.e. 15% = 101,461 EUR
Net Tax Shelter available for production Investment – Interest – Commission = 531,057 EUR = 42% of the qualifying spend in Belgium
Max. 30% 378,000 EUR Max. 30% spent on indirect AV costs
The net advantage of the Tax Shelter Certificate for the producer comes to 676,410 EUR - 101,461 EUR (commission) - 43,892 EUR (interest) = 531,057 EUR = 42% of the qualifying audiovisual spend in Belgium
* The value of the Tax Shelter Certificate may amount to a maximum of 10/9 of the qualifying spend in Belgium, in this case 1,400,000 EUR. ** Using an intermediary is not mandatory. In the schedule, an indicative percentage of 15% was used to calculate the intermediary’s fee. *** In this example -0.174% over 12 months (average H2 2017). The value of all the Tax Shelter Certificates sold for any audiovisual work may not exceed 15 million EUR.
B E L G I A N T A X S H E L T E R | 29
} OCCUPIED II, DIR. ERIK SKOLDBJÆRG & JENS LIEN, BE CO-PROD. LUNANIME
THE FLANDERS AUDIOVISUAL FUND (VAF) The Flanders Audiovisual Fund (VAF) is the cultural public funding body of Belgium’s Flemish Community. It includes three specialised funds: The VAF/Film Fund co-finances the production of individual films in various genres: fiction, animation, documentary and experimental film. Feature films, medium-length and short films are all eligible. For applications concerning foreign films, financing must be at least 50% in place or the project must have obtained production support from the lead territory’s selective film fund. The Film Fund receives an annual grant from the Flanders government, of which in 2017 10.4 million EUR was allocated to production support. The VAF/Media Fund focuses on the co-financing of highquality television series developed in co-production with a Flemish TV broadcaster. This includes fiction, animation, documentary and cross-media applications of TV series. In the case of foreign series, at least 50% of the financing must be in place, or the project must have obtained production support from the lead territory’s selective fund. At least 20% of funding must come from Flanders. It is also a requirement that a Flemish TV broadcaster is financially involved in the production of foreign series. The total budget for production support of the Media Fund for 2017 was 5.6 million EUR.
30 }
The VAF/Game Fund co-finances the development of video games by game companies in Flanders and Brussels. The Game Fund supports serious games for educational purposes and other types of serious and entertainment games. The total budget for support of the Game Fund for 2017 was 675,250 EUR. In addition, VAF has a promotional department, known as Flanders Image (flandersimage.com) along with a wide range of accompanying activities and support measures in the area of talent development, research and film culture.
FOR MORE INFORMATION ABOUT VAF: T +32 2 226 0630 E info@vaf.be W vaf.be
CO-PRODUCING WITH THE FLANDERS REGION SCREEN FLANDERS & TAX SHELTER: YOUR 55% SOLUTION Support from the Screen Flanders Economic Fund can easily be combined with other financing mechanisms such as the Belgian Tax Shelter and in some cases the Flanders Audiovisual Fund (VAF). If, for example, an audiovisual cost is eligible for the regional Screen Flanders Fund, it can also be taken into account for the federal Tax Shelter system, which makes it simple to combine both mechanisms. Depending on the overall production budget, the Screen Flanders Fund can add an additional 13% to 15% (up to a maximum of 400,000 EUR) to the 42%Tax Shelter financing. PRODUCTION BUDGETS The fees listed in the budget model used by Flemish producers include all labour costs. No additional fringe benefits or percentages need to be added. This is also the case for employees’ fees. CO-PRODUCTION PARTNERS The first step for any foreign producer wishing to benefit from one or more of the above-mentioned incentives is to find a local co-production partner. An overview of Flanders-based producers can be found in the Screen Flanders online Industry Database (screenflanders.com).
FLEMISH INDEPENDENT FILM & TV PRODUCERS’ ASSOCIATION (VOFTP) Bosdellestraat 120, bus 15 1933 Zaventem (Sterrebeek) Belgium T + 32 2 731 3708 E info@voftp.be W voftp.be ANIM.BE Deschampheleerstraat 24-26 1081 Brussels Belgium T +32 2 412 4110 E info@anim.be W anim.be FLANDERS DOC Mark Daems Helmstraat 139A 2140 Antwerp Belgium T +32 3 236 6663 E info@flandersdoc.be W flandersdoc.be
CREDITS SCREEN FLANDERS EDITION 2018 COVER MATTHIAS SCHOENAERTS © FILIP VAN ROE @INITIALS-LA.COM EDITORIAL BOARD CHRISTIAN DE SCHUTTER, KATRIEN MAES, JAN ROEKENS ART DIRECTION KARIN PAYS CONTENT & COPY EDITING IAN MUNDELL PRINT WILDA.BE PUBLISHED BY SCREEN FLANDERS / VAF All stills copyrighted by the respective producers. This brochure can be viewed online on issuu.com and screenflanders.com More news and features on screenflanders.com
} HASSEL, DIR. AMIR CHAMDIN & ESHREF REYBROUCK, BE CO-PROD. LUNANIME
SCREEN FLANDERS IS POWERED BY:
C R E D I T S | 31
SCREENFLANDERS.COM
LES MISERABLES VERSAILLES III STATE OF HAPPINESS COLD COURAGE THE MISSING II HASSEL OCCUPIED II THE TEAM II HIGH TIDES FOX AND HARE GEORGE & PAUL RUSTY DIMITRI ZIGGY AND THE ZOOTRAM KURSK REDBAD THE MUTE BRECHTS DREIGROSCHENFILM ELECTRIC GIRL RACER AND THE JAILBIRD GANGSTA I KILL GIANTS 55 STEPS IRON SKY: THE COMING RACE FUNAN HARVIE AND THE MAGIC MUSEUM PLOEY YOU NEVER FLY ALONE DRAGON RIDER WHERE IS ANNE FRANK?
2018 DEADLINES
9 MARCH - 7 SEPTEMBER - 30 NOVEMBER SCREENFLANDERS.COM
follow us on