The European Commission hasapproved new and amended national aid schemes that support film-making inIreland and Poland under EC Treaty state aid regulations.
The Irish Section 481 schemeto support film production, which amends the existing scheme previouslyapproved by the Commission, allows film production companies to obtain 80% taxrelief on investments of up to $44.8m (Euros 35 million) or 80% of the productionbudget of a single film.
The Commission concludedthat Ireland's recently amended scheme is compatible with Article 87(3)(d) ofthe EC Treaty which allows aid to promote culture, provided it does not undulydistort trade and competition within the Single Market.
John O'Donoghue, Irish minister for Arts, Sport and Tourism, welcomed the decision of the European Commission. "This clears the way for the most significant enhancement ever of the Section 481 scheme," he said. "This will more than double what the scheme can offer to film producers. All of those involved in the film industry shall now work to ensure that the Irish film sector makes full use of this provision. Coming on the eve of the Cannes Film Festival, the decision could not be more timely. I believe the enhanced scheme will underline the attractiveness of Ireland in the global film market."
Legislation setting up thePolish audiovisual fund and the Polish Film Institute came into force on January1, 2006. The scheme provides grants to support all stages of production,distribution and promotion of films that are relevant to Polish and Europeanculture, including the production of films by Polish expatriate centres.
The aid, which will beadministered by the Polish Film Institute, will amount to $32.6m (PLN100million) per year. After an amendment to the legislation was made on May 5 toreduce the scope of the territorial conditions and of the aid intensitiesincluded in the original legislation, the Commission was able to conclude thatthe scheme is compatible with Article 87(3)(d) of the EC-Treaty.
The Commission decided thatthe Irish and Polish subsidies would not give rise to undue distortion ofcompetition within the Single Market.
"These decisionsillustrate how state aid rules can allow Member States to support media andculture, while ensuring that competition concerns are taken into account,"said EU Competition Commissioner Neelie Kroes.