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Act Amending Article 194Ter Of The 1992 Income Tax Code Relating To The System Of Tax Shelter For Audiovisual Production (1)

Original Language Title: Loi modifiant l'article 194ter du Code des impôts sur les revenus 1992 relatif au régime de tax shelter pour la production audiovisuelle (1)

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belgiquelex.be - Carrefour Bank of Legislation

12 MAI 2014. - An Act to amend section 194ter of the Income Tax Code 1992 relating to the tax shelter regime for audiovisual production (1)



PHILIPPE, King of the Belgians,
To all, present and to come, Hi.
The Chambers adopted and We sanction the following:
Article 1er. This Act regulates a matter referred to in Article 78 of the Constitution.
Art. 2. The title of Sub-Section IV, Part I, Part III, Chapter II, Section III, of the Income Tax Code 1992, inserted by the Act of 2 August 2002, replaced by the Act of 22 December 2003 and amended by the Acts of 17 May 2004, 3 December 2006, 21 December 2009 and 17 June 2013, is replaced as follows:
"Subsection IV. - Companies that invest in a framework convention on the tax shelter regime for audiovisual production".
Art. 3. In Article 194ter, § 1erthe same Code, inserted by the Act of 2 August 2002, replaced by the Act of 22 December 2003 and amended by the Acts of 17 May 2004, 3 December 2006, 21 December 2009 and 17 June 2013, the following amendments are made:
(a) in paragraph 1er, before 1°, which becomes 2°, it is inserted a 1° written as follows:
"1° eligible investor:
- the resident corporation; or
- the Belgian establishment of a taxpayer referred to in section 227, 2°;
Other:
- that an eligible production company as referred to in 2°; or
- a corporation that is bound to it in accordance with Article 11 of the Corporate Code; or
- only a television company,
which signs a framework agreement as referred to in the 5th in which it undertakes to pay amounts to receive a tax shelter certificate as referred to in the 10th;"
(b) in paragraph 1er, 1°, which becomes 2°, the words "Belgian or foreign television companies" are replaced by the words "Belgian or foreign television companies" and paragraph 1er, 1°, which becomes 2°, is supplemented by the words "and which has been approved as such by the Minister who has Finance in his powers according to a simplified procedure whose terms and conditions are determined by the King;"
(c) in paragraph 1er, it is inserted between the current 1° that becomes the 2° and the current 3° that becomes the 4°, a 3°, written as follows:
"3° intermediate eligible:
the natural or legal person involved in the negotiation and conclusion of a framework agreement in the context of the issuance of a tax shelter certificate for remuneration or benefit,
that is not itself an eligible production company or an eligible investor
and has been approved as such by the Minister who has the Finance in his or her powers, following a simplified procedure whose terms and conditions are determined by the King;"
(d) in paragraph 1er, the 2°, which becomes the 5°, is replaced as follows:
"5° framework agreement: the agreement notified, in the month of its signature, to the Federal Public Service Finance by the eligible production company, or by the eligible intermediary, by which an eligible investor undertakes, in respect of an eligible production company, to pay an amount in order to obtain a tax shelter certificate of an eligible work; ";
(e) in paragraph 1er, 3°, now 4°, the following modifications are made:
1) in the first shot, the words "a Belgian audiovisual work" are replaced by the words "a European audiovisual work", the words "a short film, with the exception of short ad films," are inserted between the words "stuned to a cinematographic exploitation," and the words "a telefilm of long fiction", and the words "a television collection" are replaced by the words "if any in episodes"
(2) the first dash is completed as follows:
"International productions in the film category of fiction, documentary or animation destined for a cinematographic exploitation are eligible provided:
- to fall within the scope of the Directive 2010/13/EU of the European Parliament and the Council of 10 March 2010 on the coordination of certain legislative, regulatory and administrative provisions of the Member States relating to the provision of audiovisual media services (Directive "Audiovisual media services");
- either to fall within the scope of a bilateral co-production agreement concluded by Belgium with another State. By State, and this applies equally to Belgium, are subject to both the federal level and all administrative subdivisions;"
(3) The second dash shall be replaced as follows:
"- for which the tax value of the tax shelter certificate issued for the production concerned is set to not more than 10 ninths of the production and operating expenses, carried out in Belgium referred to in 7° within a maximum period of 18 months from the date of signature of the framework agreement for obtaining the tax shelter certificate for the production of this work referred to in 5°. For animation films, this 18-month period is extended by six months;"
(f) to paragraph 1er, it is inserted between the current 2° which becomes the 5° and the current 4° which becomes the 7°, a 6°, written as follows:
"6° production and qualifying operating expenses, in the European Economic Area: the production expenditures that are made in the European Economic Area in relation to the production and operation of an eligible work; ";
(g) in paragraph 1er, 4°, which becomes the 7°, the words "to the ordinary regime of taxation, "are inserted between the words "tax of non-residents" and the words ", to the exclusion of the costs referred to in Article 57" and the words "of the expenses or benefits referred to in Article 53, 24°, "are inserted between the words "of the costs referred to in Article 53, 9° and 10°, "
(h) in paragraph 6, which becomes the 8th of paragraph 1erthe opening sentence is replaced as follows:
"8° expenses directly related to production: expenses related to the creative and technical production of the eligible work, such as:";
(i) paragraph 2 is repealed;
(j) in paragraph 7 which becomes the 9th of paragraph 1erthe following amendments are made:
(1) The opening sentence shall be replaced as follows:
"9° expenses not directly related to production:
including:
- expenses relating to the administrative and financial organization and the assistance of audiovisual production; ";
(2) in the second draw, the words "companies investing in a framework convention for the production of an audiovisual work" are replaced by the words "companies concluding a framework convention for the production of an audiovisual work;"
(3) in the third dash, the words ", excluding interest actually paid on loaned amounts, but" are replaced by the words "or amounts paid on the basis of a framework agreement as referred to in the 5th, ";
4) in the fifth dash, the words "invoices of audiovisual installations companies" are replaced by the words "invoices of audiovisual technical services companies";
(k) paragraph 1er is completed by a 10° written as follows:
"10° attestation tax shelter: a tax certificate, or a portion of that tax certificate, issued by the Federal Public Service Finance, exclusively upon request of the eligible production company, to that company under the terms and conditions as provided for in § 7 and supplemented by the King, on the basis of the framework agreement as referred to in 5° and the expenses made for the production and operation of an eligible work as defined in 4°. The transfer of the tax shelter certificate is notified in the month of its execution, to the Federal Public Service Finance, as well as to the eligible investor, or to all eligible investors when the attestation is issued by parts, by the eligible production company or by the eligible intermediary. The tax shelter certificate is retained by the eligible investor. A copy of the tax shelter certificate is kept at the headquarters of the production company. ";
(l) in paragraph 3, which becomes paragraph 2, the words "paragraph 1er, 4° " are replaced by the words "paragraph 1er
(m) in paragraph 4, which becomes paragraph 3, the words "scheduled in paragraph 3" are replaced by the words "scheduled in paragraph 2";
(n) in paragraph 5, which becomes paragraph 4, the words "of expenses referred to in paragraph 1er, 4° " are replaced by the words "expense referred to in paragraph 1er, 7° and the paragraph is supplemented by the words ", as referred to in paragraph 1er
(o) paragraph 7 is repealed;
(p) paragraph 9 is repealed.
Art. 4. Section 194ter, § 2, of the same Code, inserted by the Act of 2 August 2002, replaced by the Acts of 22 December 2003 and 17 May 2004, and amended by the Act of 21 December 2009, is replaced as follows:
"§2. In the head of the eligible investor, the taxable benefit is temporarily exempted for the taxable period in which the framework agreement is signed, within and under the conditions set out below, up to 310 p.c. of the amounts that the investor has pledged to pay in accordance with a signed framework agreement during the taxable period provided that they are actually paid by that investor within three months of the signature. ".
Art. 5. In section 194ter, § 3, of the same Code, inserted by the law of 2 August 2002, replaced by the law of 22 December 2003 and amended by the laws of 17 May 2004 and 21 December 2009, paragraph 3 is repealed.
Art. 6. In section 194ter, § 4, of the same Code, inserted by the law of 2 August 2002, replaced by the law of 22 December 2003 and amended by the laws of 17 May 2004, 21 December 2009 and 17 June 2013, the following amendments are made:
(a) the opening sentence of paragraph 1er is replaced as follows:
§ 4. The exemption granted on the basis of amounts paid under a framework agreement for obtaining the tax shelter certificate shall be granted and maintained only if:";
(b) in paragraph 1er, 1°, the words "vised in § 2" are inserted between the words "exempt benefits" and the words "are and remain" and the words "the last of the certificates referred to in 7° and 7° bis is sent;" are replaced by the words "tax shelter certificate is issued by the eligible production company, or by the eligible intermediary to the eligible investor; ";
(c) in paragraph 1er2°, the words "seen to § 2" are inserted between the words "exempt benefits" and the words "do not serve" and the words "the last of the certificates referred to in 7° and 7° bis is sent;" are replaced by the words "tax shelter certificate is issued by the eligible production company, or by the eligible intermediary, to the eligible investor; ";
(d) in paragraph 1er3° and 5° to 9° are repealed;
(e) in paragraph 1er, 4°, which becomes 3°, the words "resident companies or Belgian institutions of taxpayers referred to in section 227, 2°, who have concluded this agreement" are replaced by the words "eligible investors";
(f) paragraph 1er is supplemented by a 4° written as follows:
"4° the exempt profits referred to in § 2 are limited to 150 p.c. of the final estimate of the tax value of the tax shelter certificate as resumed in the framework agreement. ";
(g) paragraphs 2 to 4 are repealed.
Art. 7. Article 194ter, § 4bis, of the same Code, inserted by the law of 17 May 2004 and amended by the law of 21 December 2009 is repealed.
Art. 8. In section 194ter of the same Code, inserted by the law of 2 August 2002, replaced by the law of 22 December 2003 and amended by the laws of 17 May 2004, 3 December 2006, 21 December 2009 and 17 June 2013, paragraphs 5 and 6 are replaced by two paragraphs written as follows:
§ 5. The exemption becomes final only if the tax shelter certificate referred to in § 1erParagraph 1er10°, is actually issued no later than 31 December of the fourth year following that of the signing of the framework convention.
The claimed exemption, either from the head of the sums that were actually paid on the basis of the framework agreement within the period referred to in § 2, or from the head of the tax value of the tax shelter certificate, and from the deferral referred to in § 3, paragraph 2, may be granted no later than for the taxation year that is bound to the third tax period that follows the calendar year in which the tax shelter certificate was issued.
The final exemption granted on the basis of the amounts paid under a framework agreement for obtaining the tax shelter certificate shall be granted only if the investor attached to the tax return for the tax period in which he claims the final exemption of a copy of the tax shelter certificate that he received in accordance with § 1erParagraph 1er, 10°, and to the extent that the limits and limits referred to in § 3 are met by taxable period.
§ 6. For the period between the date of the first payment on the basis of a framework agreement and the time when the tax shelter certificate is issued by the production company eligible to the eligible investor, but with a maximum of 18 months, the eligible production company may award to the eligible investor an amount calculated on the basis of the payments actually made in the framework agreement for the obtaining of the fixed rate shelter,
Art. 9. Section 194ter of the same Code, inserted by the Act of 2 August 2002, replaced by the Act of 22 December 2003 and amended by the Acts of 17 May 2004, 3 December 2006, 21 December 2009 and 17 June 2013, is supplemented by six paragraphs, as follows:
"§ 7. The tax shelter certificate is issued by the Federal Public Service Finance and transmitted to the eligible production company only if, under the terms and conditions set out below and the terms and conditions provided by the King:
1° the eligible production company, or the eligible intermediary, has notified the framework agreement to the Federal Public Service Finance in accordance with § 1erParagraph 1er, 4° ;
2° the eligible production company has requested the tax shelter certificate based on the notified framework agreement and the expenditures made for the realization of the production and operation of an eligible work as defined in § 1erParagraph 1er6° and 7°;
3° the eligible production company, or eligible intermediary, has handed over to the Federal Public Service Finance with the application for tax shelter certification:
- a document by which the Community concerned certifies that the work meets the definition of an eligible work referred to in § 1erParagraph 1er, 4° ;
- a document by which the Community concerned certifies that the realization of this work is completed and that the overall financing of the work carried out under this article respects the condition and ceiling referred to in § 4, 3°;
4° at least 70 p.c. of expenditure referred to in § 1erParagraph 1er, 6°, are expenses directly related to production within the meaning of § 1erParagraph 1er8°;
5° the eligible production company has no arrears to the National Social Security Office at the time of the conclusion of the framework agreement;
6° the conditions referred to in § 4, 1° to 3° shall be respected in an uninterrupted manner;
7° All conditions of quality, limit, ceiling, time and territoriality referred to in this article have been met.
In the event that it is found that either of these conditions ceases to be observed or defaulted for any taxable period, the previously exempt profits are considered to be profits obtained during that taxable period.
In the event that the eligible investor has not received the tax shelter certificate as at 31 December of the fourth year following that of the signing of the framework agreement, the temporary exempt benefit is considered to be profit of the last taxable period during which the tax shelter certificate could be validly issued.
Final exemption is, in all cases, limited to 150 p.c. of the tax value of the tax shelter certificate. The possible surplus of the amounts that have been paid and that have been taken as provisionally exempt profits in accordance with §§ 2 and 3 is considered to be a benefit of the taxable period during which the tax shelter certificate is issued.
By derogation from section 416, in the cases referred to in the three preceding paragraphs, late interest is due on the tax due as of June 30 of the year following the taxation year for which the exemption was first sought.
§ 8. The tax value of the tax shelter certificate as referred to in § 1erParagraph 1er, 10°, shall be determined in accordance with the terms determined by the King to:
- 70 p.c. of the amount of qualifying production and operating expenses in the European Economic Area, as referred to in § 1erParagraph 1er6° for the production of the work referred to in § 1erParagraph 1er5°, and which are expenses directly related to production within the meaning of § 1erParagraph 1er8°;
- with a maximum of ten ninths of the amount of production and operating expenses carried out in Belgium as referred to in § 1erParagraph 1er, 7° within a maximum period of 18 months from the date of signature of the framework convention for obtaining the tax shelter certificate for the production of this work referred to in § 1erParagraph 1erFive.
For animated films, this 18-month period is extended by six months.
If, however, the total of expenses exposed in Belgium that are directly related to production, as referred to in § 1erParagraph 1er, 8°, is less than 70 p.c. of the production and operating expenses carried out in Belgium as referred to in § 1erParagraph 1er, 7°, the tax value of the tax shelter certificate is then reduced proportionally from the deviation as a percentage of the actual expenditures that are directly related to production compared to the required 70 p.c..
The maximum total tax values of the tax shelter certificates are by work eligible for 15.000.000 euros.
A tax shelter certificate can only be transferred once, by a production company eligible for an eligible investor, or to several eligible investors when the tax shelter certificate is issued by shares.
§ 9. Payments agreed in the framework agreement must be made in full no later than three months before the tax shelter certificate is issued.
§ 10. The Framework Convention for the Production of an Eligible Work requires that:
1° the name, company number, social object and date of registration of the eligible production company;
2° the name, company number and social object of eligible investors;
3° the name, company number, social object or identity and national number, as well as the date of registration of eligible intermediaries;
4° the identification and description of the eligible work under the framework agreement;
5° the budget of the expenses required by the said work, distinguishing:
- the share of the production company;
- the share funded by each eligible investor already engaged;
6° the agreed method of remuneration of amounts allocated to the performance of the framework agreement;
7° the guarantee that each eligible investor is not a production company or a television undertaking;
8° the commitment of the production company:
- to respect the expenditure requirement of 90 p.c. in Belgium in accordance with § 1erParagraph 1er, 7° ;
- to limit the final amount of the sums allocated in principle to the execution of the framework agreement for the exemption of profits to a maximum of 50 p.c. of the overall expenditure budget of the work eligible for all eligible investors and to effectively allocate all amounts paid in accordance with § 2 to the execution of that budget;
- to make at least 70 p.c. expenditures referred to in § 1erParagraph 1er7°, in expenses directly related to production referred to in § 1erParagraph 1er8°;
- to mention in the final generic of the work the support provided by Belgian legislation on the tax shelter;
9° the commitment of the production company and intermediaries to respect the legislation relating to the tax shelter regime and in particular § 12 of this article.
The King determines the practical modalities for the development, content and form of the framework convention.
§ 11. No economic or financial benefit may be granted to the eligible investor, except for low-value commercial gifts within the meaning of Article 12, § 1erParagraph 1er, 2°, of the Value Added Tax Code. The guarantee of the completion of the eligible work and the issuance of the tax shelter certificate is not considered to be an economic or financial benefit, provided that the eligible investor, in the event of an appeal to this guarantee, does not receive more than the amount of taxes and late interest due by the latter in case of non-compliance with this exemption condition.
The eligible investor may not have held or held, directly or indirectly, rights over the eligible work.
The foregoing stipulations do not derogate from the right of the eligible investor to claim the possible deduction as professional costs of other amounts other than those paid under the framework agreement and which have also been allocated to the production of eligible works, under the conditions mentioned in sections 49 et seq.
By derogation from sections 23, 48, 49 and 61, costs and losses, as well as less-values, provisions and depreciations in relation to the acquisition of the tax shelter certificate, are not deductible as professional costs or losses or exonerated.
§ 12. The offer of the tax shelter certificate by the eligible production company or eligible intermediary and the intermediation in the framework conventions shall be carried out in accordance with the provisions of the Act of 16 June 2006 on public tenders of investment instruments for negotiation in regulated markets.
Art. 10. The entry into force of this Act is fixed by the King on 1er day 2e months following the prior approval of the European Commission, and applies to the framework conventions signed from that date.
The framework agreements signed prior to that date may still benefit from the application of section 194ter, Income Tax Code 1992, as it existed before being amended by this Act.
Promulgate this law, order that it be clothed with the seal of the State and published by the Belgian Monitor.
Given in Brussels on 12 May 2014.
PHILIPPE
By the King:
Minister of Finance,
K. GEENS
Seal of the state seal:
The Minister of Justice,
Ms. A. TURTELBOOM
____
Note
(1) House of Representatives (www.lachambre.be):
Documents: 53-3490
Full report: 22 April 2014.
Senate (www.senate.be):
Documents: 5-2859
Annales du Senate: April 24, 2014.