The French government has rejected a proposed bill to reduce the local tax credit for French feature film production after an outcry from the local industry.
The finance committee of the country’s national assembly originally adopted the bill on October 20, which proposed a reduction in the rebate from 30% to 25% for films with a production budget of more than €7m and to 20% for films with a budget of less than €7m from 2026.
The tax credit forms a cornerstone of French film production funding. Of the more than 200 French-produced films that shoot in the country each year, a large majority access this tax credit – more than 80% in 2022, just under 80% in 2021, and nearly 75% in 2020 according to CNC figures – based on qualifying criteria including language and locations.
The proposed reduction would have impacted international producers co-producing films with French partners, although no change was proposed for the inward investment-focused TRIP (Tax Rebate for International Production), which helps attract high-budget footloose film and TV productions to France with a 30% incentive on eligible spend.
Devastating consequences
French politicians proposing the amendment to the local credit had claimed a reduction would save some €30m per year, but studios and professional guilds argued the consequences would be devastating and have a ripple effect on entire regional economies should enough projects relocate to countries with better incentives.
The current tax credit rate “brings much more business to France than it costs”, said Olivier Marchetti, the president of Provence Studios, which has serviced local and international productions such as The Serpent Queen, The Nun 2, The Amateur and Titane.
“It is a question of cultural and industrial sovereignty. Our attractiveness, our jobs and our talents are at stake.”
Provence Studios joined forces with facilities including Paris’ Studio de Bry, to lobby politicians, and the BLIC, BLOC and ARP guilds issued a strongly-worded joint statement following the bill’s adoption on October 23, in which they warned the proposed move “would make France no longer competitive with its European neighbours”.
They said it would lead to “a relocation of film shoots, resulting in a decline in employment, tax revenues and the profitability of public investment in studios, contrary to the France 2030 plan”.
The France 2030 plan has a $380m (€350m) investment from the government designed specifically to bolster the country’s ability to attract international productions by revamping local film studios.
Guillaume de Menthon, who runs the Studios de Bry, which just wrapped production on Fred Cavayé’s high-budget feature Les Misérables for Studiocanal, adds: “France is doing so much for the infrastructure, but before we start to bring in foreign productions, let’s first try to hang onto our own.”
Eastern Europe
Several high-budget French-language film and TV projects with a majority French partner have recently shot in Eastern Europe, where shooting costs are generally cheaper. Hungarian director Laszlo Nemes’s Moulin, about French resistance hero Jean Moulin, produced by Alain Goldman’s Montmartre Films and co-produced and distributed by Studio TF1, is shooting in Hungary, which offers a 40% credit.
Clovis Cornillac’s comedy Il Etait Une Fois, produced by Radar Films and SND, and period drama The Countess Of Monte Cristo for Netflix and Studio TF1, both shot in the Czech Republic, which has a 25% rebate.
“The whole point of the tax credit was to prevent films from relocating as they were doing en masse before it was launched,” claimed producer Marc Missonnier of Moana Films, who is also president of producers guild UPC.
Missonnier said Vanessa Filho’s recent box-office hit Consent, produced by Moana, “could never have been made without the 30% tax credit”.
Culture minister
France’s culture minister Rachida Dati expressed her support for the current tax credit in place during a Senate hearing on October 28.
National assembly deputy Jean-René Cazeneuve, who originally put the bill on the table, withdrew it, citing “the emotion provoked and out of respect for the film industry”.
Anthony Boulogne, MP for the right-wing RN party, pushed back and reintroduced the amendment citing “budgetary responsibility”. This was rejected by 176 to 70 votes.
While the tax credit remains in place for now, it comes amid a series of recent blows to financing films in France and towards the end of what has been a tough year for the French industry at the box office, with total admissions significantly down year on year.
“It is definitely not the best time to be lowering the quality and quantity of films produced in France even further,” said Missonnier.
The proposal had been part of a financing bill that has already caused an industry outcry since it seeks to reduce the budget for public audiovisual funding by €71m, most of which will be for France Televisions, whose reach extends to the production of feature films, series, and local news and entertainment.
This all comes after Canal+’s recent budget cuts in local film production over the next three years from more than €600m ($692m) between 2022-2024 to €480m ($503m), keeping the local industry on edge heading into next year.
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