French General Tax Code
In forceI. - Film production companies and audiovisual production companies subject to corporation tax that assume the functions of executive production companies may benefit from a tax credit in respect of the production expenses referred to in III, corresponding to operations carried out in France with a view to the production of cinematographic or audiovisual works produced by production companies established outside France.
The benefit of the tax credit is subject to the executive production companies' compliance with social legislation. In particular, it cannot be granted to production companies that use employment contracts referred to in the third paragraph of Article L. 1242-2 of the Labour Code in order to fill jobs that are not directly linked to the production of a specific work.
II. - 1. The cinematographic or audiovisual works mentioned in I belong to the fiction and animation genres. These works must meet the following cumulative conditions:
a) Not be eligible for financial support for production from the Centre national du cinéma et de l'image animée;
b) Contain, in their dramatic content, elements linked to French culture, heritage or territory. Compliance with this condition is verified by means of a points scale, the content of which is set by decree;
c) Be the subject of eligible expenditure mentioned in III, of an amount greater than or equal to €250,000 or, where the production budget for the work is less than €500,000, of an amount corresponding to at least 50% of this budget and, for works belonging to the fiction genre, of a minimum of five days' filming in France.
2. The following are not eligible for the tax credit referred to in I:
a) Cinematographic or audiovisual works of a pornographic nature or that incite violence;
b) Cinematographic or audiovisual works that can be used for advertising purposes.
III. - 1. The tax credit, calculated for each financial year, is equal to 30% of the total amount of the following expenditure corresponding to operations or services carried out in France before 31 December 2024:
a) Remuneration paid to authors listed in Article L. 113-7 of the French Intellectual Property Code in the form of advances to be credited against revenues from the exploitation of the works, as well as the related social charges;
b) Remuneration paid to performers mentioned in Article L. 212-4 of the Intellectual Property Code and to supplemental artists, by reference for each of them to the minimum remuneration provided for by the collective agreements and conventions concluded between the employees' and employers' organisations in the profession, as well as the related social charges ;
c) Salaries paid to directing and production staff, as well as the related social charges;
d) Expenses relating to the use of technical industries and other providers of cinematographic or audiovisual creation;
e) Transport, catering and accommodation expenses incurred by the production of the work on French territory. A decree determines the conditions and limits within which these expenses are taken into account.
The cumulative amount of the remuneration mentioned in a and the salaries mentioned in c paid to the director as a technician is retained per natural person, up to a cumulative amount calculated as follows:
- 15% of the share of the production cost of the work below €4,000,000;
- 8% of the share of the production cost of the work greater than or equal to €4,000,000 and less than or equal to €7,000,000;
- 5% of the share of the production cost of the work greater than or equal to €7,000,000 and less than €10,000,000.
The rate mentioned in the first paragraph of this 1 is increased to 40% for fictional cinematographic or audiovisual works in which at least 15% of the shots, i.e. an average of one and a half shots per minute, are digitally processed to add characters, set elements or objects taking part in the action or to change the rendering of the scene or the camera's point of view, provided that, within the production budget for the work, the total amount of eligible expenditure relating to the digital processing of shots exceeds two million euros.
2. The authors, performers and directing and production staff mentioned in 1 must be either French nationals or nationals of a Member State of the European Community, a State party to the Agreement on the European Economic Area, a State party to the European Convention on Cinematographic Co-production of the Council of Europe of 2 October 1992, or a European third State with which the European Community has concluded agreements relating to the audiovisual sector. Foreigners, other than the aforementioned European nationals, who are French residents are treated in the same way as French citizens.
3. For the purposes of calculating the tax credit, the basis of eligible expenditure is capped at 80% of the production budget for the work.
IV. - The expenses mentioned in III are eligible for the tax credit from the date of receipt by the President of the Centre national du cinéma et de l'image animée of an application for provisional approval. Provisional approval is granted by the President of the Centre national du cinéma et de l'image animée after the works have been selected by a committee of experts. This approval certifies that the works meet the conditions set out in II. The conditions for issuing provisional approval are set by decree.
V. - Public subsidies received by executive production companies in respect of operations giving entitlement to the tax credit are deducted from the bases for calculating this credit, whether they are definitively acquired by them or reimbursable.
VI. - The sum of tax credits calculated in respect of a single work may not exceed 30 million euros.
VII. - Tax credits obtained for the production of a single cinematographic or audiovisual work may not have the effect of increasing the total amount of public aid granted to more than 50% of the production budget for the work.
VIII. - A decree specifies the conditions of application of this article.
