The government is talking about reducing the total amount people can write off their tax bills by 10%. France is trying to tackle its national debt crisis just like every other European country. This would be bad news for France’s Sofica tax break. Last year, Soficas injected €36 million ($45 million) in 98 movies, investing on average €370,000 in each feature. Half of all French feature productions use the tax break, including some English-language films.
“It’s cheap money from the producer’s point of view,” one insider tells me.
Worse, the cash-strapped Finance Ministry could cap the amount each Sofica can raise. Or combine the across-the-board 10% tax reduction with slashing the total Soficas are allowed raise through private investors.
Compared to other French tax shelters, Sofica is risky and long-term, which stands in its favour.
Joel Thibout of French financier Backup Films, which runs two Soficas, tells me he’s sceptical about the government clamping down on Soficas directly though. “There’s too much at stake politically given the comparatively tiny amount of money they cost the government,” he says.
French filmmakers have until December to make their feelings known, when next year’s Budget goes to the vote. France’s film and TV producers are a powerful lobby. Given recent demonstrations in Paris when President Sarkozy announced he was raising the pension age to 62, just imagine the media scrum if French stars such as Vanessa Paradis or Vincent Cassel take to the barricades.