Tax Shelter

The Tax Shelter is a tax incentive for companies based in Belgium to invest in audiovisual (co-)productions. Companies investing in a recognised European audiovisual work can benefit from a tax exemption thanks to the Tax Shelter. For companies, the Tax Shelter is an incentive to invest in those sectors; for audiovisual producers, it is a way to get additional resources from the market.

All Belgian companies or Belgian establishments of non-Belgian companies, whose main purpose is the production of audiovisual works, are eligible as producers. You may not be a television broadcaster or be affiliated with a broadcaster.

Producers can seek investors themselves or use a specialised organisation as an intermediary. Both the intermediary and the producer must be certified by the Federal Ministry of Finances.

Any domestic company or establishment of a Belgian taxpayer is eligible as an investor, unless it is a production company or television broadcaster.

European audiovisual works co-produced with Belgium, such as animation, documentary and fiction features, medium-length and short films qualify for the system, as well as animation and live-action series, telefilms and TV documentaries. These can be intended for cinema exhibition or television and multimedia (VR, web series, documentary web) broadcasting (or screening) with the aim of being shown to a wide audience. They must also be certified as a European work, as defined in the Audiovisual Media Services Directive (2010/13/EU). In Flanders, you must apply for this recognition as a European audiovisual work to the Department of Culture, Youth and Media (CJM) in order to obtain a Tax Shelter certificate.

International audiovisual works co-produced with Belgium, in the following categories: feature film, documentary or animation film intended for a wide audience, provided that:

• they either fall within the scope of the Audiovisual Media Services Directive (2010/13/EU)
• or they fall within the scope of a bilateral co-production agreement concluded by Belgium (or one of its Communities) with another state.

The basis for calculating the Tax Shelter benefit and the investment are the eligible direct and indirect audiovisual expenses that the audiovisual work will spend in the European Economic Area (EEA) and in Belgium. The two elements are inextricably linked. Against each investment there is a tax benefit for the investor and a spending obligation of eligible audiovisual expenditure for the Belgian (co-)producer.

Investors are obliged to pay their entire investment within three months of the conclusion of the Tax Shelter framework agreement. By doing so, investors pre-finance part of the production and/or post-production costs through the purchase of the certificate that offers them a temporary tax exemption. For its part, the Belgian (co-)producer must make the eligible expenses within 18 months (24 months for animation) of signing the framework agreement.

Certified producers can approach investors directly to invest through the Tax Shelter. Alternatively, the Belgian (co-)producer works with an intermediary certified by the Federal Ministry of Finances. This intermediary matches potential investors with projects and draws up the framework agreements. In exchange for these services, a commission is charged to the producer. Several banks also offer this investment opportunity to their customers through an intermediary.

The net amount that can be used to finance the audiovisual work is determined by several variables, including the Euribor interest rate, the commission that the intermediary settles with the producer and the insurance taken out. Taking these variables into account, it can be said that producers can finance between 38% and 40% of eligible Belgian expenditure through the Tax Shelter mechanism. A detailed calculation can be found below in the brochure published by the Federal Ministry of Finances.

The Tax Shelter system is a win-win-win situation for the three parties involved: producers are offered an attractive framework for the financing and cash-flow of their audiovisual projects; investors receive a tax exemption via a virtually risk-free investment; and the Belgian state benefits from increased economic activity. The Belgian Tax Shelter system has been in place since 2003 and has been a huge boost for the professionalisation and international exposure of our audiovisual sector.