The future of Germany's film funds has come under further threat with news of proposed tighter regulations by the Federal Ministry of Finance

German business daily the Handelsblatt reported that the Ministry of Finance (BMF) intends to consider investors in film funds merely as acquirers of film rights rather than as producers.

This would mean investors would only have a 2% annual write-off over 50 years rather than an immediate 100% tax deductible write-off - thereby depriving media funds of their attraction for private individuals with a high tax burden.

"If we are going to talk about a write-off period, 3-10 years would be more realistic for fiction", Ernst & Young's Dr Karl Hamberger declared, "The US tax authority, for example, reduced theirs from 20 years to 10 years".

Hamberger also pointed out that there was speculation about a revision of the Media Decree, but it seems likely that "blind pool" funds (where the investment is not tied to any particular project) will have a better chance of survival than leasing-style funds where film titles have been specified and the fund receives guaranteed license payments.

As Hans-Joachim Beck, a leading judge at Berlin's Financial Court, declared: "Only the person who bears the full risk should also have tax advantages".