Cultural diversity

Cultural policies and measures - Best practices

Europe approves new British tax breaks for cinema – 2006/11/23

The European Commission (EC) has finally given the green light to new UK tax incentives after months of negotiations that have led to a revision of the cultural test for British films, Cineuropa reports in its recent newsletter (No. 41). According to the newsletter, the EC’s ratification of the new tax relief legislation is great news for British cinema, which had been in deadlock for months. One year ago, the cultural test determining whether a film can qualify for the new tax incentives was submitted to the EC for state aid clearance. But the EC did not accept that the test, as passed by the UK Parliament in April 2006, went far enough to satisfy the state aid requirements of European law and expressed concerns regarding the treatment of European coproductions in the new tax incentives law. The British government revised the text with the EC so that it met the EU requirements for member states when subsidizing commercial films for cultural purposes to protect open competition between member states.

Competition commissioner Neelie Kroes said she was satisfied with the settlement arrived at by the British authorities, which complies with the conditions set out in its Audiovisual Communication. “It confirms that European coproductions can benefit from the scheme,” she said. For UK film minister Shaun Woodward, “This announcement is good news for the UK film industry. It marks the future for a successful, stable, and sustainable film industry. We have a film framework that will deliver for both the industry and audiences alike. The film scheme will be good for independent and large studio productions.” The scheme has been approved until March 31, 2012.

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