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25 DECEMBER 2016. - An Act respecting the exemption of income invested in a framework agreement for the production of a scenic work

PHILIPPE, King of the Belgians,
To all, present and to come, Hi.
The House of Representatives adopted and sanctioned the following:
Article 1^er. This Act regulates a matter referred to in Article 74 of the Constitution.
Art. 2. In chapter I, Part I, Title III, of the Income Tax Code 1992, an article 179/1 is inserted as follows:
"Art. 179/1. Without prejudice to the application of section 182, non-profit associations and other legal persons referred to in section 220, who are registered as an eligible production corporation or eligible intermediary as referred to in sections 194ter and 194ter/1, are subject to corporate tax for the taxation year related to a taxable period in which they have entered into a framework agreement under section 194ter ".
Art. 3. The title of sub-section IV of Part I, Part III, Chapter II, Section III, of the Income Tax Code 1992, is supplemented as follows:
"or a scenic work. ".
Art. 4. In the same subsection IV, an article 194ter /1 is inserted as follows:
"Art. 194ter/1. § 1^er. The application of section 194ter is extended to eligible production companies whose main purpose is the production and development of original productions.
§ 2. For the purposes of this article, the following means:
1° Eligible work: by derogation from Article 194ter, § 1^erParagraph 1^er4°, an original scenic production as referred to in 2°, which is approved by the competent services of the Community concerned as a European scenic work, that is:
- carried out by one or more producers in one or more Member States of the European Economic Area or supervised and effectively controlled by one or more producers established in one or more Member States of the European Economic Area;
- for which the production and operating expenses in Belgium referred to in Article 194ter, § 1^erParagraph 1^er, 7°, shall be carried out within a period of not more than 24 months after the date of signature of the framework agreement for obtaining the tax shelter certificate for the production of this work referred to in Article 194ter, § 1^erParagraph 1^er5° and no later than one month after the First of the scenic work;
2° original scenic production: a theatrical production, circus, street theatre, opera, classical music, dance or cabaret, including musical and ballet, as well as the production of a total show, in which the script, theatrical text, the governing or the scenography is new, or which concerns a reinterpretation;
3° total show: the combination of different arts of the scene referred to in 2°, possibly complemented by choreography, stage games, special effects, pyrotechnic effects and innovative technologies in terms of sound, image and scenography;
4° First: the first representation of the scenic work in Belgium or another state of the European Economic Area.
§ 3. By derogation from Article 194ter, § 1^erParagraph 1^er8° and 9°, mean:
1° expenses directly related to production and exploitation: expenses related to the creative and technical production of the eligible work, such as:
- costs covering artistic rights with the exception of the development costs of the scenario that date from the period preceding the framework convention;
- salaries and other staff allowances or allowances of independent service providers associated with the creation and execution of the eligible work;
- the salaries and other allowances of the actors, acrobats, dancers, conductors, musicians, singers and artistic functions, whether or not independent, which are only related to the execution of the eligible work;
- social expenses related to wages and expenses covered by the second and third dash;
- the costs of decors, accessories, instruments, costumes and attributes, which are carried to the stage;
- costs related to lighting, sonorization, special effects and other technical means;
- transportation costs for the fifth and sixth dash;
- the transportation and accommodation costs of persons, limited to 25 p.c. of the costs referred to in the second and third dash;
- space rental costs for rehearsals and representations;
- insurance costs directly related to production;
- the production-specific publishing and promotion fees: posters, flyers, creation of the press file, website or production-related web page, as well as the First;
2° expenses not directly related to production and operation:
including:
- expenses relating to the administrative, financial and legal organization and the assistance of scenic production;
- the financial costs and commissions paid as part of the recruitment of companies entering into a framework agreement for the production of an eligible work;
- the costs inherent in the financing of the eligible work or the amounts paid on the basis of a framework agreement as referred to in Article 194ter, § 1^erParagraph 1^er5°, including legal fees, legal fees, interest, warranty fees, administrative fees, commissions and representation fees;
- invoices that originate from the eligible investor, with the exception of invoices from scenic technical services companies where the goods or services billed are directly related to production and to the extent that the amount of these invoices corresponds to the price that would have been paid if the participating companies were totally independent of each other;
- the distribution costs that are borne by the production company. Costs in principle supported by the structure that hosts scenic production such as cultural centres are not eligible.
§ 4. By derogation from Article 194ter, § 1^er, paragraph 5, expenditures made within six months prior to the signing of the Eligible Work Framework Convention are never eligible.
§ 5. By taxable period, the exemption provided for in section 194ter, § 2, is granted to a maximum of 50 p.c., capped at 750,000 euros, of the taxable reserved profits of the taxable period, determined before the constitution of the exempt reservation referred to in section 194ter, § 4. This limit and ceiling are applicable to the total exemptions referred to in sections 194ter and 194ter/1.
By derogation from Article 194ter, § 8, paragraph 4, the sum of all tax values of the tax shelter certificates is by work eligible for up to 2,500 000 euros.
§ 6. In order to be able to testify, in accordance with Article 194ter, § 7, paragraph 1^er, 3°, second dash, that the realization of the original scenic production is completed, the Community concerned must ensure that it was represented in public for the first time in the European Economic Area."
Art. 5. In the same subsection IV, an article 194ter/2 is inserted as follows:
"Art. 194ter/2. For the purposes of articles 194ter and 194ter/1, where the eligible work referred to in 194ter or 194ter/1, § 2, paragraph 1^er, 1° is produced by a legal person established in the bilingual territory of Brussels-Capital under the jurisdiction of the federal State, the "Company concerned" means the "Competent Authority of the Federal State".
The King shall determine the competent authority of the Federal State referred to in paragraph 1^eras well as the procedures for the application of articles 194ter and 194ter/1.".
Art. 6. Article 227, 3°, of the same Code is supplemented by the words "with the exception of legal persons referred to in Article 227/1".
Art. 7. In chapter I, Part I, Title V, of the Income Tax Code 1992, an article 227/1 is inserted as follows:
"Art. 227/1. Without prejudice to the application of section 182, legal persons who are subject to the tax of non-residents and who are registered as an eligible production corporation or an eligible intermediary referred to in sections 194ter and 194ter/1, in accordance with section 179/1, are subject to the tax of non-residents under the rules applicable to non-residents referred to in section 227, 2 ".
Art. 8. This Act comes into force on the day of its publication in the Belgian Monitor and articles 2 to 7 are applicable to the framework conventions signed from 1^er day of the month following this publication.
Given in Brussels on 25 December 2016.
PHILIPPE
By the King:
Minister of Finance,
J. VAN OVERTVELDT
State seal:
Minister of Justice,
K. GEENS
____
Note
(1) House of Representatives (www.lachambre.be)
Documents: K54-2205.