French General Tax Code
In forceI. - Film production companies and audiovisual production companies subject to corporation tax that assume the functions of delegated production companies may benefit from a tax credit in respect of the production expenses referred to in III corresponding to operations carried out with a view to the production of long-term cinematographic works or approved audiovisual works.
The benefit of the tax credit is subject to the delegated production companies' compliance with social legislation. In particular, it cannot be granted to delegated production companies that use employment contracts mentioned in 3° of Article L. 1242-2 of the French 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 genres of fiction, documentary, animation and audiovisual adaptation of shows. These works must meet the following conditions:
a) Be made entirely or mainly in French or in a regional language used in France with the exception of animated cinematographic works mentioned in the penultimate paragraph of 1 of III and fictional cinematographic works mentioned in the last paragraph of the same 1 of III, as well as cinematographic works for which the use of a foreign language is justified for artistic reasons relating to the script ;
b) Be eligible for financial support for film or audiovisual production;
c) Be produced mainly on French territory. A decree determines the terms and conditions under which compliance with this condition is verified as well as the conditions and limits under which it may be waived for justified artistic reasons;
d) Contribute to the development of French and European film and audiovisual creation as well as its diversity.
2. The following are not eligible for the tax credit mentioned in I:
a) Cinematographic or audiovisual works of a pornographic nature or inciting violence;
b) Cinematographic or audiovisual works that can be used for advertising purposes;
c) News programmes, current affairs debates and sports, variety or games programmes;
d) Any audiovisual document or programme that only incidentally includes elements of original creation.
3. Documentary audiovisual works are eligible for the tax credit when the amount of eligible expenditure mentioned in III is greater than or equal to €2,000 per minute produced. In the case of audiovisual adaptations of shows, this floor is lowered to €1,000 for works lasting more than ninety minutes and €1,250 for works lasting between sixty and ninety minutes.
III. - 1. The tax credit, calculated for each financial year, is equal to 20% of the total amount of the following expenditure incurred in France:
a) Remuneration paid to authors listed in article L. 113-7 of the Intellectual Property Code, as well as the related social security charges;
b) Remuneration paid to performers listed in article L. 212-4 of the aforementioned code and to additional artists, by reference for each of them to the minimum remuneration provided for in 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) Expenditure relating to the use of technical industries and other service providers for film and audiovisual creation;
d bis) In the case of audiovisual adaptations of shows, the additional artistic rights actually paid to the show producer relating to French expenditure and the "set cost" in cash;
e) Expenditure on transport, catering and accommodation occasioned by the production of the work on French territory. A decree determines the conditions and limits within which these expenses are taken into account;
f) For documentary audiovisual works, expenses relating to the acquisition of rights to exploit archive images for a minimum period of four years made to a legal entity established in France, provided there is no relationship of dependence, within the meaning of Article 39(12), between this entity and the production company benefiting from the tax credit.
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 individual, 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.
For audiovisual adaptations of shows, eligible expenses are those incurred until 31 December 2024.
The rate mentioned in the first paragraph of this 1 is raised to 25% for fictional and animated audiovisual works and documentary audiovisual works. It is increased to 30% for animated cinematographic works and for cinematographic works other than animated works produced entirely or mainly in French or in a regional language used in France.
Fictional cinematographic 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 involved in the action or to change the rendering of the scene or the camera's point of view are treated in the same way as animated cinematographic works.
The rate referred to in the first paragraph of this 1 is reduced to 10% in the case of works of audiovisual adaptation of shows.
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 Union, a State party to the Agreement on the European Economic Area, a State party to the Council of Europe's European Convention on Transfrontier Television, a State party to the Council of Europe's European Convention on Cinematographic Co-Production or a European third State with which the European Union has concluded agreements relating to the audiovisual sector. Foreign nationals, 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 and, in the case of international co-production, 80% of the share managed by the French co-producer.
IV. - The expenditure referred to in III is 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 issued 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.
V. - Non-reimbursable public subsidies received by companies and directly allocated to the expenditure referred to in III are deducted from the bases for calculating the tax credit.
VI. - 1. The sum of tax credits calculated in respect of a single cinematographic work may not exceed 30 million euros.
2. The sum of tax credits calculated for a single audiovisual work may not exceed:
a) For a fictional work:
1,250 per minute produced and delivered when the production cost is less than €10,000 per minute produced;
1,500 per minute produced and delivered when the production cost is greater than or equal to €10,000 and less than €15,000 per minute produced;
€2,000 per minute produced and delivered where the production cost is greater than or equal to €15,000 and less than €20,000 per minute produced;
€3,000 per minute produced and delivered where the production cost is greater than or equal to €20,000 and less than €25,000 per minute produced ;
€4,000 per minute produced and delivered when the production cost is greater than or equal to €25,000 and less than €30,000 per minute produced;
€5,000 per minute produced and delivered when the production cost is greater than or equal to €30,000 and less than €35,000 per minute produced ;
€7,500 per minute produced and delivered when the production cost is greater than or equal to €35,000 and less than €40,000 per minute produced;
€10,000 per minute produced and delivered when the production cost is greater than or equal to €40,000 per minute produced;
b) For a documentary work and audiovisual adaptation of shows: €1,450 per minute produced and delivered;
c) For an animated work: €3,000 per minute produced and delivered.
Audiovisual works of fiction produced as part of an international co-production for which at least 30% of the production cost is covered by foreign funding and for which the production cost is greater than or equal to €35,000 per minute produced may be made in a foreign language. In this case, a French-language version must be produced.
3. In the case of delegated co-production, the tax credit is granted to each of the production companies in proportion to its share of the expenditure incurred.
4. When a cinematographic work and an audiovisual work are produced simultaneously using common artistic and technical elements, the expenses mentioned in III common to the production of these two works may only be eligible for a single tax credit. The expenses mentioned in III that are not common to the production of these two works are eligible for a tax credit under the conditions laid down in this article.
VII. - Tax credits obtained for the production of the same film 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. This threshold is raised to 60% for difficult and low-budget cinematographic or audiovisual works defined by decree.
VIII. - A decree lays down the conditions for application of this article.
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