Just one week after the European Commission approved Holland's new tax break system (valid until 2003), the Federation of Film Interests - a union made up of screenwriters, directors, producers, actors and other professionals - has called for a regulation of the system. The federation is talking to policymakers and financiers about some of its criteria, which hitherto had been based on 'agreements', rather than clearly defined rules.
The Dutch industry has become increasingly unhappy with what it perceives as foreign producers using the Dutch tax system to fill the gaps in their budget by teaming up with a token Dutch co-producer. Mick Jagger's Enigma is often quoted as an example of this practice. Until now, there had been a tacit understanding that 50% of the film's budget should be spent in Holland, but it is unclear whether this has been put in practice.
Another sore point for Dutch filmmakers is the fact that the tax system has attracted new producers to the game, rather than boost the more experienced producers' output. "In the long run, nobody benefits from adventurers and cowboys," commented filmmaker Eddy Terstall in the national press. The Federation would prefer to link the budget raised through the tax break with the producer's track record.
The most high profile 'failure' has been the $60 million Ocean Warrior, which neither of its producers, Bous de Jong and Pieter Kroonenburg managed to save from bankruptcy last month.
Although legally, extra regulations cannot be imposed, the Federation hopes that they will be observed by all parties involved. But so far, the banks involved in financing have not consented to any kind of regulation whatsoever. The European Commission is likely to be equally hesitant about excluding foreign parties from film financing.