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Tax Rebate for International Productions

Tax Rebate for International Productions: TRIP

What is it?

The Tax Rebate for International productions (TRIP) supports foreign companies whose projects are completely or partly made in France. To be eligible, projects must include elements related to French culture, heritage, or territory. Eligibility is based on a Cultural Test, which assesses the relativity of the story, locations, characters, sources, landmarks, creators, crew and technical hubs.

The amount allocated comprises 20% of the film expenses incurred in France, and caps at € 10 million per project. The TRIP is given to the French company managing the production in France on behalf of the foreign producer.

 

 

Eligible companies

To file a TRIP application, a company must meet the following criteria:

 

• Be subject to corporate income tax in France.

• Act as PRODUCTION SERVICES COMPANY for the sequences filmed or

produced in France, and enter a production services agreement with the

foreign producer.

The production services company is defined as “the company that has been contracted

by the foreign production company to manage the physical production.”

 

There is no restriction to the capital mix of the applicant or its main business. The

company can thus specialize in production services, act an executive production company

in film & TV or be an animation or VFX studio, a subsidiary of the foreign producer, an

ad hoc created company, etc.

Eligible productions expenses

1-Live action

> Eligible expenses

In order to be eligible, expenses must be incurred by the French production services company who
submits the application to the CNC. These expenses must contribute directly to the production needs.
The maximum tax rebate is €10M. It comprises 20% of the following expenses,
excluding tax:
• Wages and compensation for French and European authors, actors & crew members
• Fringes
• French crew per diem partly if mentioned on pay slip
• All technical expenses:
- rentals & purchases of material, film stock & tapes
-post-production: image lab, image editing, voice recording
sound effects & sound design, mixing, sound editing, credits & trailers
- digital visual effects
- subtitling studios
• Transportation, including international transport of materials and travel of the
cast & crew to and from France
• Accommodation for cast and crew
• Catering expenses that are incurred for the needs of the production (catering,
restaurants)
• Expenses relating to a shorter shoot outside of France using the same crew and material
• Depreciation amounts.
For actors, the compensation amount considered for the tax rebate is limited to the minimum compensation amount outlined in the collective bargaining agreements of the movie industry.
When the production services company employs production personnel on a permanent basis, eligible costs will only include the wages, payroll taxes and benefits that incur when the concerning personnel was really working on the physical production.
2 - Animation


> Eligible expenses

These expenses must directly contribute to the production needs.
The maximum tax rebate is €10M. It comprises 20% of the following expenses,
excluding tax:
• Wages, fringes and compensation for French & European authors, actors & crew members, including teams in charge of: rigging & animation set up, storyboarding, character conception & modelling, set conception & modeling, exposure sheets, pre-visualization, rotoscopy, tracking, motion capture, lay out, animation, set construction, colorization, lighting & rendering, compositing, visual effects, image & sound editing, mixing... When production staff members are permanent employees of the production services company, the salaries and social contributions for the period during which they were actually working on the eligible production are taken into account.
> Expenses incurred for hiring technical companies and other providers of services
• equipment, supplies, computer hardware and software used directly for the animation process
• The aforementioned computer software must be paid off during the production of the work for which it was designed or purchased post-production: image lab, image editing, voice recording, sound effects and sound design, mixing, sound editing, credits & trailers
• digital visual effects
• negative image film, magnetic sound film, and in general, all digital or non-
digital image and sound media; filming, finishing, video, and subtitling studios.
> Transportation and catering expenses
• transport of artistic and technical materials and supplies;
• transport, accommodation and catering for the artistic and technical teams.
This also concerns international transport of materials and crew.
> Depreciation expenses
• Tax-deductible depreciation accruals for fixed assets held by the French
production/animation company and directly related to the production of the
project for which the tax rebate may be claimed. Those depreciation expenses
that correspond to the period in which the asset was actually used to produce
the work eligible for the tax rebate go toward the rebate.
3 – VFX & post-production projects

The TRIP also supports live-action projects with a significant proportion of VFX shots, providing VFX and post-production are executed mainly in France (minimum eligible spend of €1M). “VFX-intensive” means that at least 25% of the shots or an average of two and a half shots per minute of the film are digitally processed.
This means: addition of characters, visual elements or objects involved in the action, modification of the rendering of a scene or the camera’s point of view. If the projects fulfill this condition,
their producer can apply as an animated project.

Application process

1 - Provisional approval

The production services company of the film must submit a file requesting provisional
approval from the CNC that includes the necessary supporting documents. The application
is available on the websites of the CNC and Film France: www.cnc.fr & www.filmfrance.net.
Applications cannot be submitted until a production services agreement has been made between the foreign producer and the French company. This contract (or letter of intent) is one of the supporting documents required for the assessment. The starting date for considering eligible expenses is the reception date of the application at the CNC TRIP office. No expense incurred before this date will be considered as eligible, with the exception of authors fee under the condition that this fee was paid the same fiscal year as that of the application.
The CNC, following Film France’s assessment, will come to a decision on the application, based only on the eligibility criteria (including the rating scales) defined in here. Should these criteria be fulfilled, the CNC will issue a provisional TRIP approval to the applicant.
2 - Final approval

Once the film has been completed, the production services company must submit a final approval application to the CNC, along with the necessary documents including a video copy of the film.
The CNC, with the support of Film France, will then verify that the finished film complies
with the eligibility criteria and will issue a final approval.
3 - Collecting the international tax rebate

At the end of each fiscal year, the French company must have the production accounts certified by a statutory auditor (CPA). This certification must be sent with the provisional TRIP approval to the tax authorities along with the company’s income tax return. Most of the French companies end their fiscal year on December 31st, and submit their corporate tax after March 31st.
If the amount of the tax rebate exceeds the corporate income tax during the fiscal year,the difference will be paid by the French State.
The tax authorities may pay the tax rebate before the final approval application is submitted. However, the final approval officially confirms the right to keep this tax rebate. In the event that final approval is refused, the tax authorities will demand the reimbursement of the tax rebate granted. For the French company, the amount of the tax rebate paid constitutes revenue that is
tax and VAT exempt.
4 - TRIP discount

Even though the TRIP is a non-assignable and inalienable debt of the French State to the French Company, as soon as provisional approval has been obtained, it is possible to discount it at a bank, under certain conditions fixed by the law. French banks used to discount tax rebates tend to only advance max 80% of the prospective Rebate amount.
5 - Credits

During either the beginning or end credits and in either French or the original language, productions that receive the TRIP must mention the following: “Cette œuvre a bénéficié du crédit d’impôt en faveur de la production de films étrangers en France. ” Proposed English translation: “This film benefited from the French Tax Rebate for International Production."

Contact

CNC Film France
French National Film Commission
Baptiste Heynemann, Franck Priot, Mélanie Chebance
T: +33(0)1 44 34 35 34 T: +33(0)1 53 83 98 98
@: baptiste.heynemann@cnc.fr @: rebate@filmfrance.net

Main foreign productions accredited by the TRIP

Despicable me - June 2013Despicable me - June 2013

Hereafter (USA)  2009                                                          

Director: Clint Eastwood

 

Nodame Cantabile (Japan) 2009

Director: Hideki Takeuchi    

 

Despicable me (USA) 2009

Director : Pierre Coffin & Christopher Renaud

Animation studio : Mac Guff

 

Inception (USA)   2009                                                         

Director: Christopher Nolan

 

The Tourist (USA)  2009

Director: Florian Henckel von Donnerschark

 

Paris Connections (UK) 2010

Director: Harley Cokliss

 

Midnight in Paris (USA) 2010

Director: Woody Allen

 

Thor (USA) 2010

Director: Kenneth Branagh

 

Hugo Cabret (USA) 2010

Director: Martin Scorsese

 

The Monte Carlo Story (USA) 2010

Director: Tom Bezucha

 

Gossip Girl (USA) 2010

TV series

 

Le lion de Poubara (Gabon) 2010

Director: Henri-Joseph Kouba Bididi

 

Catacomb Tapes (USA) 2010 

Director : Nikki Wall

 

Girl on a Bicycle (Germany) 2010

Director: Jeremy Leven

 

 

Grand Masters (China) 2010

Director: Wong Kar-Wai

 

 

The darkest hour (USA) 2010

Director: Chris Gorak

 

Sherlock Holmes 2 (UK) 2010

Director: Guy Ritchie

 

The Lorax (USA)

Director: Chris Renaud

 

Kiss & Kill (USA)

Director: Robert Luketic

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