During the recent holiday weekend, 80,000 people went to one of the Flemish movies playing now in cinemas – Code 37, based on the TV series of the same name; Hasta la vista, an extremely popular comedy/drama; and Het varken van Madonna, the new movie by director Frank van Passel. That’s a number that 10 years ago no one would have believed (let alone that there would be three Flemish films in the cinemas at the same time).
Certainly the marked change in both the quality and quantity of films by Flemish directors has something to do with the establishment of the Flemish Audio-Visual Fund (VAF), which supports both new and seasoned directors and helps promote their work. The other reason, put simply, is money.
Private investors in the now eight-year running Belgian Tax Shelter System have made a huge difference in film funding. “It has really improved the situation,” says Hans Everaert, financial director of the VAF. “It has sped up the financing process spectacularly.”
The Tax Shelter System is an investment fund specifically for film production. Businesses based or with branches in Belgium can invest up to €500,000 annually in Belgian film productions or co-productions. The federal government provides a tax exemption for investors. Between 2003 and 2009, €310 million found its way into productions across the country, including to those that became some of the most popular Flemish films of all time, like Loft and De helaasheid der dingen.
“In the past, it was always like the last 20 or 30% of the financing that was always so difficult to find,” explains Everaert. “The tax shelter provides exactly that – it is gap financing.”
Not only does the financing allow more films to be made, it has professionalised the sector. “Because of the tax shelter, producers were obliged to become more professional, certainly in terms of financing skills, but also, they have to convince investors, they have to provide reports, they have to work with the tax authorities. The shelter made the situation better as far as film production in Flanders is concerned.”
The scheme is also responsible for Belgium being made a co-producer of international projects. The BBC drama series Parade’s End is filming in Flanders now. “They are actually shooting here rather than somewhere else that just looks like Ypres,” says Everaert, “ and they came here because of the tax shelter. Almost every film made in Flanders now is made with tax shelter money.”
The tax shelter also covers quality, fiction TV series. But the scheme, admits Everaert, “is not clear enough. It takes a long time for investors to understand how it works.”
That’s where a good investment advisor comes in. It is not required to work through an intermediary to take advantage of the tax shelter – businesses can contact production companies directly and avoid brokerage fees – but a good adviser can clarify the process and the technical aspects of the scheme, plus cut the workload involved for the investor.
De Witte-Viselé Associates in Wemmel have become specialists in the tax shelter scheme. Partner Rolf Declerck says that businesses often don’t even look into the possibility of the shelter because they think it’s only for media businesses or that it’s too risky. In fact, the production companies have a whole set of guarantees, so “there’s no risk at all,” he says. “You get a minimum 4.52% net profit on your investment, guaranteed. This is more than you’ll get from any bank.”
The 4.52% is the minimum return on investment; of course, if a film does well, an investor could earn more. The government, for its part, earns back the tax break it provides businesses that invest in the shelter through additional tax revenue from increased employment in the sector.
Investors can choose the film or TV series they’d like to support, and some do it with an eye for more than money. Product placements, tickets for their staff to film festivals and marketing opportunities are also motivators. Declerck once assisted a businesswoman who very much wanted to meet Flemish actor Matthias Schoenaerts, “so she invested in Rundskop”.