New tax credit for audiovisual work and cinematography

The Third Budget Amendment Act for 2020 includes a new tax credit designed to support media investment in programmes and audiovisual works.

Scope of application

Companies subject to corporate income tax, who actively publish television, radio or on-demand audiovisual media services can benefit from the new tax credits.

These companies are permitted to receive a 10% reduction for the period between 1^st March 2020 and 31^st December 2020. Companies with subsidiaries, whose exclusive corporate purpose is to invest in their producers’ cinematographic works must take into account the turnover of the subsidiary in proportion to its holding in the subsidiary.

Eligible expenditure

Expenses which fall under the following are eligilble for the new tax credit :

Purchases of broadcasting rights to works
Investment on behalf of the producer in the financing of works
Financing of the writing and development of works
Adaptation of eligible works for the blind or partially-sighted
Financing of author training
Promotion or marketing of works
Payments to the authors of cinematographic or audiovisual works
Royalties paid to collective management organizations

Calculating the application rate

The new tax credit equates to 15% of the total expenditure incurred between March 1^st 2020 and December 31^st2020, either in France, a member country of the European Union or the EEA.

Grants received by companies, which are directly allocated to the aforementioned expenses, are deducted from the calculation.

Use of the tax credit

The tax credit is charged against the corporate income tax due by the company either for the financial year ending December 31^st 2020 or the first financial year ending on, or after, that date. The excess is refunded.

This measure comes into force on a date set by decree, which may be less than one month after the European Commission’s official response to the compliance of the measure with European Union law.

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