French General Tax Code
In forceI.-Music publishing companies, within the meaning of Article L. 132-1 of the Intellectual Property Code, subject to corporation tax may benefit from a tax credit in respect of the expenses mentioned in III of this article incurred with a view to supporting the creation of musical works, controlling and administering published musical works, ensuring the publication, exploitation and commercial distribution of published musical works and developing the repertoire of an author or composer, provided that they are not owned, directly or indirectly, by a television or radio broadcasting service publisher.
II. II - Expenditure incurred with a view to supporting the creation of musical works, controlling and administering published musical works, ensuring the publication, exploitation and commercial distribution of published musical works and promoting the development of the repertoire of new talent under a contract entered into on or after 1 January 2022 and meeting all of the following conditions is eligible for the tax credit referred to in I:
1° Be entered into by a music publishing company established in France, in another Member State of the European Union or in another State party to the Agreement on the European Economic Area that has entered into an administrative assistance agreement with France with a view to combating tax evasion and tax avoidance, and that provides services relating to the creation of musical works and their publishing operations there;
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2° Stipulate that the author or composer undertakes to grant a preferential right to the company for the publication of their future works under the conditions set out in Article L. 132-4 of the Intellectual Property Code;
3° Tying a music publishing company to a new talent, defined as an author or composer whose published works have not exceeded a sales and listener threshold defined by decree for two separate albums or who, as author or co-author, composer or co-composer or as part of a collective work, has not contributed to the writing or composition of more than 50% of the works featured on two separate albums, each of which has exceeded this sales and listener threshold.
In the case of works with lyrics, the author or composer must be able to demonstrate that he or she is a new talent. In the case of works with lyrics, the tax credit is reserved for works by new talent, at least half of which are in French or use a regional language in use in France. By way of derogation, for companies that meet the definition of a microenterprise given in Article 2(3) of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty, works with lyrics that do not fall into this category qualify for the tax credit up to the number of French-language works or works using a regional language in use in France, registered in the same year during the same financial year by the same company in the repertoire of a collective management organisation within the meaning of Article L. 321-1 of the French Intellectual Property Code, excluding foreign sub-published repertoires. The headcount threshold is calculated excluding personnel paid on a fee basis. In the case of works by new talent, the benefit of the tax credit is assessed at the level of the company liable for corporation tax for all the works submitted each year to the repertoire of a collective management organisation within the meaning of the same article L. 321-1, excluding sub-published foreign repertoires.
III.-The tax credit for new talent is assessed at the level of the company liable for corporation tax for all the works submitted each year to the repertoire of a collective management organisation within the meaning of the same article L. 321-1, excluding sub-published foreign repertoires. III.-The tax credit, calculated for each financial year, is equal to 15% of the total amount of the following expenses incurred up until 31 December 2024, for the operations mentioned in II of this article carried out in France, in another Member State of the European Union or in another State party to the agreement on the European Economic Area that has signed an administrative agreement with France to combat tax fraud or evasion, provided that they are included in the determination of taxable income:
1° For expenditure to support the creation of musical works within the framework of a contract referred to in II:
> a) The costs of the permanent staff of the company in question a) The company's permanent staff costs including:
-salaries and social security contributions for staff directly involved in supporting the creation of musical works: directors of artistic departments, artistic directors, artistic managers, artistic advisors, musical directors, repetiteurs, artistic collaborators, musical supervisors, musicians, musical accompanists, sound engineers and technicians, managers and collaborators in the synchro department (cinema, audiovisual, multimedia production, musical illustration, promotion of product or service brands), managers and collaborators in the editing-correction department, managers and staff in the production department, managers and staff in the orchestral equipment department, administrative and financial directors, legal directors, legal managers, lawyers, legal assistants, managers and staff in the data processing, enhancement and analysis department, managers and staff in the digital communication and development department;
-the remuneration, including social security contributions, of managers, corresponding to their direct participation in the creation of musical works, up to an amount set by decree, which may not exceed €50,000 per year. This remuneration is only eligible for the tax credit for small businesses, within the meaning of Article 2 of Annex I to the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014;
b) The costs of the company's non-permanent staff, including salaries and social security contributions, relating to artistic directors, artistic managers, artistic advisors, musical directors, rehearsers, artistic collaborators, musical supervisors, musicians, musical accompanists, sound engineers and technicians hired for the creation of musical works;
c) Travel and accommodation expenses and allowances, up to an amount per night, set by decree, which may not exceed €270;
> d) Expenses relating to training and professional development, up to an amount per night, set by decree, which may not exceed €270. d) Expenses relating to the author's or composer's musical training;
e) Expenses relating to the author's or composer's musical training. e) Expenditure relating to the organisation of, or the author's participation in, music writing seminars, including registration and travel costs;
> f) Expenditure relating to the author's creation and performance of his or her work. f) Expenditure on creation and layout: hire of rehearsal or recording studios, sound recordings, hire and transport of equipment and instruments;
For expenses relating to the control of the author's work, the author's own expenses are reimbursed. 2° For expenditure relating to the supervision and administration of musical works published under a contract referred to in II:
> a) The costs of permanent staff of the company, including a) The company's permanent staff costs, including:
-salaries and social security contributions for staff directly responsible for the control and administration of musical works: directors of artistic services, artistic directors, artistic managers, artistic advisers, musical directors, repetiteurs, artistic collaborators, musical supervisors, musical accompanists, sound engineers and technicians, managers and collaborators of the synchro department (cinema, audiovisual, multimedia production, musical illustration, promotion of product or service brands), managers and collaborators of the editing-correction department, managers and staff in the copyright department, managers and staff in the manufacturing department, managers and staff in the orchestral equipment department, catalogue managers, administrative and financial directors, legal directors, managers and staff in the data processing, enhancement and analysis department, lawyers, legal assistants, directors or managers of distribution departments, royalty managers, accounting directors, chief accountants, accountants ;
-the remuneration, including social security contributions, of managers, corresponding to their direct involvement in the control and administration of musical works, up to an amount set by decree, which may not exceed €50,000 per year. This remuneration is only eligible for the tax credit for small businesses, within the meaning of Article 2 of Annex I to the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014;
b) The costs of declaring musical works;
c) Monitoring expenses relating to the illicit exploitation of musical works;
d) The costs of defending musical works and the rights of authors and composers;
3° For expenditure relating to the publication, exploitation and commercial dissemination of published musical works and the development of the repertoire of the author or composer under a contract referred to in II:
> a) The costs of the permanent staff of the publishing house a) The company's permanent staff costs, including:
-salaries and social security contributions relating to staff directly responsible for the publication, exploitation and commercial distribution of published musical works: directors of artistic services, artistic directors, artistic managers, artistic advisers, musical directors, répétiteurs, artistic collaborators, musical supervisors, musical accompanists, sound engineers and technicians, managers and collaborators in the synchro department (cinema, audiovisual, multimedia production, musical illustration, promotion of product or service brands), managers and collaborators in the manufacturing department, managers and collaborators in the orchestral equipment department, catalogue managers, administrative and financial managers, legal directors, legal managers, lawyers, legal assistants, accounting directors, chief accountants, accountants, communications and public relations directors, marketing directors, public relations or communications managers, broadcasting or marketing managers, press or public relations attachés, managers and staff in the data processing, enhancement and analysis department, managers and staff in the digital communication and development department;
-the remuneration, including social security contributions, of the managers, corresponding to their direct participation in the publication, exploitation and commercial distribution of the musical works published, up to an amount, set by decree, which may not exceed €50,000 per year. This remuneration is only eligible for the tax credit for small businesses, within the meaning of Article 2 of Annex I to the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014;
b) Expenditure on the graphic reproduction and printing, both physical and digital, of published musical works, including the costs of proofreading and correcting manuscripts;
c) Expenditure on the marketing of musical works on physical or digital media;
> d) Expenditure on commercial canvassing for the production of musical works on physical or digital media. d) Business development expenses incurred with a view to exporting and distributing published musical works abroad, including in particular travel and accommodation expenses and allowances, up to a maximum amount per night, set by decree, of €270;
> e) Expenses incurred in connection with the e) Expenses incurred for the participation of the author or composer in television or radio broadcasts or audiovisual programmes, as well as those incurred for the presentation of published musical works in broadcasts or programmes;
> f) Expenses relating to the creation, production and distribution of musical works by the author or composer. f) Expenditure relating to the creation and management of audiovisual and multimedia content devoted to published musical works;
> g) Expenditure relating to the capturing of musical works on television or radio, or on audiovisual or multimedia programmes, as well as expenditure incurred for the presentation of published musical works in broadcasts or programmes g) Expenditure relating to the recording of published musical works and the creation of phonographic demos: hire of recording studios and costs of production, arranging, mixing and mastering;
h) Expenditure relating to the hire or management of audiovisual and multimedia content devoted to published musical works;
i) Expenditure relating to the creation and management of audiovisual and multimedia content devoted to published musical works h) The cost of hiring or transporting equipment or instruments;
i) Insofar as they are not capitalised, the cost of purchasing small items of equipment used exclusively for the publication, distribution or commercial exploitation of the published work;
> j) Amortisation of the cost of equipment used for the publication, distribution or commercial exploitation of the published work;
i) The cost of purchasing small items of equipment used exclusively for the publication, distribution or commercial exploitation of the published work. j) Depreciation allowances, when they correspond to tangible or intangible fixed assets used exclusively in the context of the publication, distribution or commercial exploitation of the published work;
> k) Expenditure relating to rehearsals or rehearsals for the production of a work of art. k) Expenditure relating to rehearsals and promotional performances of published musical works. The amount of expenditure eligible for the tax credit is limited to €300,000 per contract mentioned in II of this article.
The expenses defined in 1°, 2° and 3° of this III entrusted to companies linked to music publishing established in France, in another Member State of the European Union or in another State party to the Agreement on the European Economic Area that has signed an administrative assistance agreement with France to combat tax fraud and evasion are included in the tax credit base up to a maximum of €1,600,000 per financial year.
IV.-The same expenses may not exceed €1,600,000 per financial year. IV -The same expenditure may not be included both in the basis for calculating the tax credit referred to in I and in the basis for calculating another tax credit.
V -The rate referred to in the first paragraph of this article may not be less than the rate referred to in the second paragraph of this article. V.-The rate mentioned in the first paragraph of III is increased to 30% for companies that meet the definition of micro, small and medium-sized enterprises given in Article 2 of Annex I to the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014.
VI.-The expenditure mentioned in III of this article is eligible for the tax credit from the date on which the Minister for Culture receives an application for provisional approval. This approval, issued after consultation with a committee of experts, certifies that the conditions set out in II have been met. The operating procedures of the committee of experts and the conditions for issuing provisional approval are laid down by decree.
VII. VII.-Public subsidies received by companies in respect of expenditure qualifying for the tax credit are deducted from the basis on which the tax credit is calculated.
VIII.-A.-The sum of public subsidies received by companies in respect of expenditure qualifying for the tax credit is deducted from the basis on which the tax credit is calculated. VIII.-A.-The sum of tax credits calculated in respect of eligible expenditure may not exceed €500,000 per company and per financial year.
IX.-The benefit of the tax credit referred to in I is subject to compliance with Article 53 of the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014.
