After months of uncertainty surrounding the future of the Dutch tax incentive scheme, policy-makers from the three government ministries involved have sent a proposal to parliament recommending the current film-friendly climate be preserved with the establishment of a new scheme offering even more generous incentives, but tempered by much tighter regulation. If approved, the system will come into place from January 2002.
Under the current system, which was established in 1999, private investors have been able to write off 127% of money invested. This is to be upped to 147%, thanks to a new scheme called FIA (film investment write-off).
When the write-off scheme was first introduced two years ago, the Dutch tax office expected to fork out around Euros2m to investors, but the shelter proved so popular it ended up paying back investors Euros100m in 1999 and 2000.
However, the box-office performances of these privately funded films did not reflect the enthusiasm with which they were financed. The 11 features released so far have only sold 500,000 tickets, half of which were accounted for by two box office hits -Leak (Lek) and Ik Ook Van Jou.
The new proposals offer the possibility of a 147% write-off under the new FIA banner. However, the criteria for eligibility will be much more stringent than in the past, so that only commercially viable projects will be able to take advantage of the new set-up. The precise terms of these criteria are not yet known, but it is expected that the government will be keeping a very close eye on projects which are to be funded with private money.
Policymakers from the Ministries of Finance, Economic Affairs and Culture have also expressed an interest in creating a new initiative to attract venture capital to promote and facilitate pre-sales and marketing and to further the broader interests of the Dutch film industry. They want to see some of the millions pouring in from investors benefiting the distribution and exhibition sectors.