31} HOW DOES IT WORK?As an economic support to cover their audiovisual expenses in Flanders, Belgian producers can apply to receive up to €400,000 of refundable advances.

Every euro invested in a production by Screen Flanders must yield at least one euro of audiovisual expenditure in the region. The projects submitted to the Fund show an average leverage of eligible spend of around four times. Financing of up to 24% of the eligible costs in Flanders is possible to a maximum of €400,000.

The support is awarded in the form of refundable advances on net receipts. From these net receipts, a percentage needs to be repaid corresponding to the proportion of total support awarded by Screen Flanders in the overall financing of the audiovisual work. The Fund is entitled to this percentage even if the advance has been repaid.

Periodical calls are made, each with a specific allocated budget. Applications are presented to a jury consisting of both economic and cultural experts who assess and prioritise all projects. Available funding is then allocated to the highest-ranking applications, in descending order, until all the money for that budget has been allocated.

SCREEN FLANDERS

CO-PRODUCTION GUIDE

SCREEN FLANDERS ECONOMIC FUNDThe Screen Flanders Economic Fund offers support to audiovisual productions and co-productions that spend all or part of their budget within the Flanders region.

Screen Flanders’ annual budget of €4.5 million is provided by Agentschap Innoveren & Ondernemen (Flanders Innovation & Entrepreneurship). The Flanders Audiovisual Fund (VAF) promotes the Fund and manages the applications in close co-operation with Flanders Innovation & Entrepreneurship.

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} WHAT KIND OF PROJECTS QUALIFY FOR SUPPORT?Fiction, documentary or animated features with a minimum length of 60 minutes as well as animated series can apply for support.

Fiction and documentary films may be spread over multiple episodes, but must tell an ongoing story. Fiction films spread over multiple episodes are only eligible if they involve an international co-production in which the total Belgian share stated in the co-production contract is less than 50%.

Animated series must comprise at least three episodes and have a minimum total broadcast time of 60 minutes for the series as a whole.

To be eligible, at least 50% of the financing of the overall production budget needs to have been secured at the time of application and the producer needs to spend a minimum of €250,000 in Flanders.

Furthermore, the project must enrich the cultural heritage of Flanders (the cultural test).

} HOW & WHEN TO APPLYScreen Flanders applications can only be made in response to a call. This year’s three application deadlines are: 4 March, 9 September and 9 December 2016. Once submitted, applications are checked to ensure that they comply with the eligibility criteria and formal requirements.All admissible applications are examined by an expert jury who will assess the following qualitative and quantitative criteria:

• The social and cultural added value of the audiovisual work in terms of the quality and attractiveness of the script (maximum score: 10 points)

• The persons and structures involved in the audiovisual work: applicant, director, cast, etc. (maximum score: 10 points)

• Efficiency and output: the commercial strengths and efficient use of the resources (maximum score: 30 points)

• Effectiveness and outcome: the impact on the Flemish audiovisual sector (maximum score: 50 points)

Applications are ranked in descending order of overall score. To appear in the ranking, an application must score at least 60 points.Available funds are shared between the highest-ranking submissions, in descending order, until funds are exhausted.

Visit www.screenflanders.com for the full set of rules & regulations.

} OTHER INCENTIVESScreen Flanders support is easily combined with other mechanisms such as the Belgian Tax Shelter and the Flanders Audiovisual Fund (VAF).

} WHAT QUALIFIES AS AUDIOVISUAL EXPENDITURE?Only certain types of expenditure are eligible when it comes to assessing how much support a project might be awarded. These expenses:

• must be incurred in Flanders;• must be incurred with the aim of completing the

audiovisual work in question;• and must benefit the structure of the Flemish

audiovisual sector.

Expenditure qualifying for support is exclusive of VAT and may not have been invoiced for at the time of application. It must be realistic and in line with market rates.

} CO-PRODUCERSFor foreign producers interested in accessing Screen Flanders’ support, the best and easiest way to find a local producer is through the producers’ associations (see page 37).

} WHO CAN APPLY?Applications must be submitted by Belgium-based producers. Foreign producers must work with a Belgian co-producer that meets all conditions.

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} WHO CAN BENEFIT FROM IT?

PRODUCERSBelgian production companies and Belgian branches of foreign production companies (subject to non-resident corporate tax in Belgium) which have been certified by the Belgian Ministry of Finance are eligible. They may not have direct links to a broadcaster. And, at the time of signing the framework agreement, the resident or the branch of the foreign audiovisual production company may not have any outstanding debts to the Social Security Office (ONSS/RSZ).

INVESTORSResident companies and Belgian branches of non-resident companies that make taxable profits in Belgium can benefit from this tax regime. Excluded are companies whose main purpose is the development and the production of audiovisual works (i.e. producers), broadcasters, credit institutions and companies that own rights in the commercial exploitation of the film. The upper limit on investment is 50% of a company’s retained profits. There is no limit on the number of investors allowed to participate in a production. The maximum exemption of retained taxable profits per investor per year is €750,000.

BELGIAN TAX SHELTERThe Belgian Tax Shelter is a government-approved efficient and transparent tax incentive designed to encourage the production of audiovisual works in Belgium. The system is open to Belgian productions as well as qualifying international (mainly European) co-productions with Belgium.

It is a win-win-win situation for the three parties involved: the producer is offered a very attractive way to finance projects; the investor obtains tax exemption through a virtually risk-free investment; and the Belgian state benefits from increased economic activity and spend.

} WHAT KIND OF PRODUCTIONS QUALIFY FOR TAX SHELTER?Productions must be audiovisual works that belong to one of the following categories:

• Live-action or animated features, medium-length or short films and documentaries intended to be shown theatrically;

• Live-action and animated made-for-television series, telefilms and TV documentaries.

The audiovisual work must be approved by the competent departments of the Flemish, French or German-speaking communities of Belgium as a European audiovisual work:

• as defined by the Audiovisual Media Services (AMS) Directive of 10/03/2010 (2010/13/EU);

• or produced within the framework of a bilateral co-production agreement concluded between Belgium (or one of its communities) and another state. There are currently bilateral co-production agreements with China, Israel, Switzerland, Morocco and Tunisia.

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If we take the example of a production with a €2 million direct and indirect qualifying audiovisual spend in the European Economic Area, this means that Tax Shelter Certificates can be sold to a total value of 70% - in this case €1,400,000. 90% of this expenditure (€1,260,000) needs to be spent in Belgium on qualifying audiovisual costs, of which a minimum of 70% (€882,000) needs to be directly related to the production, post-production and exploitation of the audiovisual work. The producer must incur these costs within 18 months (24 months in the case of animated features) of signing the framework agreement.

To acquire the optimal investment rate (48.387%), the investors buy the Certificates with a total value of €1,400,000 of qualifying expenditure for an amount of €677,418.

In return, the investors benefit from a temporary exemption of any retained taxable profits worth up to 310% of the invested sum, in this case €2,099,996. This offers them a total fiscal benefit of €36,370.

In order to find potential investors and deal with the framework agreement and legal documents, a producer may hire the services of an intermediary company. In return for its services, the intermediary will charge a percentage, in this example 15% or €101,613.

Once the audiovisual work has been completed, the Ministry of Finance delivers the final Tax Shelter Certificate based upon the approved expenditure. The final tax exemption for the investors is then recalculated. In addition to a tax benefit, the investor also earns interest on the sums paid to the producer. The interest percentage is defined by the Euribor interest rate (in this example 0.336% over 12 months) augmented with 450 basis points x 18 months/12, in this case €49,140.

} CO-PRODUCERS, INTERMEDIARIES AND BANKSThe first and necessary step for any foreign producer to benefit from the Tax Shelter is to find a local co-production partner (see page 37).

Investors can be approached directly by certified producers to arrange investment under the Tax Shelter, which will involve some legal work. An alternative is for the producer to work with an intermediary company certified by the Belgian authorities, which will match potential investors with productions and handle all the paperwork. In return for these services, the intermediaries charge a fee to the producer.

As well as specialised intermediary companies, some Belgian banks have created film funds or investment products to bring the advantage of the Tax Shelter to those of their clients who want to invest.

Based upon the amount of direct and indirect qualifying audiovisual costs the production will spend in the European Economic Area, a producer can sell Tax Shelter Certificates to investors. The total value of the Tax Shelter Certificates may amount to a maximum of 70% of the direct and indirect qualifying audiovisual costs incurred in the European Economic Area, insofar as these expenses are specifically related to the production of the audiovisual work. The value of all the Tax Shelter Certificates sold for an audiovisual work may not exceed €15 million. The investors thus pre-finance the production and/or post-production costs by purchasing a temporary tax exemption.

In return for purchasing the Tax Shelter Certificate, the investor benefits from a temporary exemption of any retained taxable profits worth up to 310% of the sum paid for the Certificate. The upper limit for an investment is 50% of a company’s retained profits. The maximum exemption of retained taxable profits per investor per year is €750,000. The investors also receive a return on the sums paid to the producer; the applied rate is based on the Euribor 12-months rate augmented with 450 basis points.The investors must make full payment within three months of signing the framework agreement. The producer must make the qualifying expenditure within 18 months of

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} WHAT’S THE ADVANTAGE FOR THE PRODUCER?Tax Shelter simulation for a co-production with a minimum €2 million of qualifying audiovisual expenditure in the EEA

* The value of the Tax Shelter Certificate may amount to a maximum of 10/9 of the qualifying spend in Belgium, in this case €1,400,000.** Using an intermediary is not mandatory. In the schedule, an indicative percentage of 15% was used to calculate the intermediary’s fee. *** www.euribor-rates.eu The value of all the Tax Shelter Certificates sold for any audiovisual work may not exceed €15 million.

48.387%optimal

investment rate

€2,000,000Direct & indirect

qualifying AV costs in the EEA

Tax Shelter Certificate €1,400,000*

Interest on investment (Euribor*** +4.5%) x 18/12 = €49,140

Net Tax Shelter available for production Investment – Interest – Commission = €526,665

= 42% of the qualifying spend in Belgium

Commission intermediary**f.e. 15% = €101,613

€1,260,00090% spentin Belgium

on qualifying AV costs

€882,000Min. 70% spent

on direct AV costs

€378,000Max. 30% spent

on indirect AV costs

€677,418Cash investment

based on the Tax Shelter Certificate value

70%

90% =

Max. 30%Min. 70%

signing the framework agreement. For animated features and series, the maximum term is 24 months after signing the framework agreement.A minimum of 90% of the Tax Shelter Certificate’s value needs to be spent in Belgium on qualifying audiovisual costs, of which a minimum of 70% needs to be directly related to the production and exploitation of the audiovisual work. This refers to costs related to the creative and technical production and post-production of the audiovisual work. Costs related to the administration and financial management of the audiovisual work do not qualify as audiovisual spend and can only be taken into account to a

maximum of 30% of the required expenditure in Belgium.Once the audiovisual work has been completed, the Ministry of Finance delivers the final Tax Shelter Certificate based upon the approved expenditure. The final tax exemption for the investors is then recalculated. If at the end of the production the required spend is not fully met, the value of the Tax Shelter Certificate will be reduced pro rata with the qualifying expenditure in Belgium at a level of 10/9. For example, for €1 million of qualifying expenditure instead of €1,260,000, the value of the Tax Shelter Certificate will be reduced from €1,400,000 to €1,000,000 x 10/9 = €1,111,111.

The net advantage of the Tax Shelter Certificate for the producer comes to €677,418 - €101,613 (commission) - €49,140 (interest) = €526,665 = 42% of the qualifying audiovisual spend in Belgium

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SCREEN FLANDERS + BELGIAN TAX SHELTER = 66%By combining the mechanisms of the federal Belgian Tax Shelter with the support of the regional Economic Fund Screen Flanders, producers can finance up to 66% of their eligible audiovisual spend in the Flanders region. If an audiovisual cost is eligible for the regional Screen Flanders Fund, it can also be taken into account for the federal Tax Shelter system, which makes it simple to combine both mechanisms.

Let’s say you are financing an international co-production with a total budget of €5 million and will be spending €2 million in Europe (EEA). For the federal Tax Shelter mechanism this results in a Tax Shelter Certificate with a value of €1,400,000 and €1,260,000 of eligible direct and indirect audiovisual costs in Belgium. Following the schedule above, 42% of these costs (or €526,665) can be financed through the Tax Shelter system.

If these eligible audiovisual costs are incurred in the Flanders region, you can apply to the Screen Flanders Economic Fund to cover an additional 24% of these costs, to a maximum to €400,000.

Both incentives together can cover up to 66% or 2/3 of your eligible audiovisual spend in Flanders, Belgium.

* Screen Flanders is a selective support mechanism.** Screen Flanders only takes direct audiovisual costs into account. For example, financing costs, hotel and transport costs are

not eligible. These costs are, however, eligible for the Belgian Tax Shelter.

AN EXAMPLE:

€2,000,000Direct & indirect

qualifying AV costs in the EEA

€1,260,00090% spentin Belgium

on qualifying AV costs

€1,000,000**qualifying direct AV

costs incurred in the Flanders region

BELGIAN TAX SHELTERFederal Incentive

SCREEN FLANDERS*Regional Incentives

Can finance up to 42% of the qualifying spend in Belgium

= 66% of the qualifying spend in Flanders, Belgium

Can finance up to 24% of the qualifying spend in the

Flanders region+

36 } 6 6 P E R C E N T

THE FLANDERS AUDIOVISUAL FUND (VAF) The VAF/Film Fund supports audiovisual productions in Flanders, as well as international co-productions with Flanders. The aims of the Fund are threefold:

• to develop a sustainable audiovisual industry;• to encourage and support upcoming audiovisual talent;• and to promote a vibrant audiovisual culture in Flanders.

The Film Fund receives an annual grant from the Flanders government, of which in 2015 €10.4 million was allocated to production support. Filmmakers can apply for support for fiction, documentary animation and Filmlab (experimental) projects.

The VAF/Media Fund was launched in 2011 to support the production of independent television series co-financed by a Flemish broadcaster. The Media Fund supports three types of series: animation, documentary and fiction. The total budget for production support of the Media Fund for 2015 was €3.6 million. For foreign series a minimum of 20% of the budget must be financed through a Flemish producer and the majority of the financing must already be in place. This means that a minimum of 50% of the total budget must already be financed or support by a public film body must already be in place.

The VAF/Game Fund was launched in 2012 to support the creation of games produced by Flanders-based game developers. The Game Fund supports serious games for educational purposes and other types of serious and entertainment games. The total budget for support of the Game Fund for 2015 was €730,000.

PRODUCERS’ ASSOCIATIONSThe first step for any foreign producer to benefit from one or more of the above mentioned incentives is to find a local co-production partner. An overview of Flanders-based producers can also be consulted in the Screen Flanders online Industry Database (screenflanders.com).

FLEMISH INDEPENDENT FILM & TV PRODUCERS’ ASSOCIATION (VOFTP)Bosdellestraat 120, bus 15BE-1933 Zaventem (Sterrebeek)T +32 (0)2 731 37 08E info@voftp.be W www.voftp.be

ANIM.BEDeschampheleerstraat 26BE-1081 BrusselsT +32 (0)2 412 41 10E info@anim.be W www.anim.be

FLANDERS DOCMark Daemsp/a Helmstraat 139A BE-2140 AntwerpT +32 (0)3 236 66 63E info@flandersdoc.be W www.flandersdoc.be

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THE SCREEN FLANDERS FILM COMMISSION The Screen Flanders Film Commission provides information to both domestic and international productions in areas such as location scouting, shooting permits, incentives, production and post-production throughout the Flanders region. We can put you in touch with the local film offices or direct specific enquiries to the right place.

Stretching from the North Sea coast to the rolling countryside of central Belgium, Flanders offers the filmmaker a wide range of urban and rural landscapes and location opportunities. While some are unique or unmistakeably Flemish, others can double for locations across Europe with no loss of atmosphere.

This wide range of settings available in Flanders can be viewed on the Screen Flanders online database (screenflanders.com). Each location file within the database comes complete with photographs and descriptions in English, along with contact details for the local film office. The database can be searched by keyword, by geographical position, by type of location and by historical era.

It is the aim of the Screen Flanders Film Commission to contribute to a rewarding shooting period in Flanders benefiting all parties.

The Screen Flanders Film Commission is a member of the Association of Film Commissioners International (AFCI) and the European Film Commission Network (EUFCN).

CONTACTSCREEN FLANDERS FUNDJan Roekens - E jroekens@vaf.be

SCREEN FLANDERS FILM COMMISSIONKatrien Maes - E kmaes@vaf.be

Flanders Film HouseBischoffsheimlaan 38BE-1000 BrusselsBelgiumT +32 (0)2 226 06 30E screenflanders@vaf.beW screenflanders.com

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CREDITSSCREEN FLANDERS EDITION 2016COVER CYNTHIA NIXON © MAARTEN DE BOER / CONTOUR / GETTY IMAGESEDITORIAL BOARD KATRIEN MAES, JAN ROEKENS, CHRISTIAN DE SCHUTTERART DIRECTION KARIN PAYS CONTENT & COPY EDITOR NICK RODDICK, JO RODDICK PRINT WILDA.BEPUBLISHED BY SCREEN FLANDERS / VAF

All stills copyrighted by the respective producers. This brochure can be consulted online on issuu.com and screenflanders.com

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