Tax shelter: maximum deductibility and return

Warning

A Tax Shelter subscription through BNP Paribas Fortis Film Finance, a subsidiary of BNP Paribas Fortis, is governed by the Belgian regime on audiovisual and stage productions as defined under Articles 194ter and 194ter/1 of the Income Tax Code.
Investments in the financial operation proposed are intended for businesses taxed at the standard corporate tax rate, i.e. 25%.

In order to take advantage of this product, a company needs to generate a sufficient increase in taxable profits compared to the intended subscription amount, and must account for it in the manner required by law. We therefore strongly advise you to consult your accountant or a financial or tax adviser.

Before investing, please read the prospectus and, in particular, please make sure that you are aware of all the risks relating to this financial operation (see below).

Investing in the Tax Shelter scheme involves certain risks, including the fact that the tax benefit is granted immediately but not definitively—it will only be confirmed upon compliance with a number of conditions amongst which the issuance, by the tax administration, of a tax certificate after verifying that the producer of the financed project has met all legal requirements.

The risk of partial or total non-issuance of the tax certificate for a project is not covered by an insurance but is backed by an irrevocable and unconditional guarantee from BNP Paribas Fortis Film Finance. Should this guarantee mechanism fail, it could result in the loss of the investment and part of the expected return.

BNP Paribas Fortis markets the financial transaction offered by BNP Paribas Fortis Film Finance to its clients but has made no commitment regarding its successful completion.

How does the tax shelter work?

The tax shelter is a unique product that offers profit-generating companies the opportunity to invest in Belgian cultural production (audiovisual, performing arts or video game projects) to achieve a potentially attractive return.

1. You can subscribe to future audiovisual or performing arts projects selected by BNP Paribas Fortis Film Finance at any time. You will be notified once BNP Paribas Fortis Film Finance has selected one or more projects for financing and the subscription amount will be debited from your account.
   
   
2. A subscription is a payment with no "forward repayment". The intention is to fund a producer’s audiovisual or stage project. In return for this payment, the producer undertakes to:
   • Make a remuneration payment after 18 months
   • Meet their obligations, so that the investor is entitled to the tax certificate within the legal four-year period;
   if the conditions of the tax shelter are met, the investor may offset 421% of the payment for tax purposes, resulting in a benefit of 105.25% of the subscription.
   
   
3. On the amount paid, taking into account all benefits, you should obtain a potential total net income of 13.27% after 18 months (this return applies until December 2026 and varies every 6 months depending on the Euribor).
   
   
4. You can now invest as little as €15,000. The maximum amount is €237,000. Per financial year, the law allows a tax deduction limited to:
   • Half of the increase in taxable profits for that financial year;
   • An absolute ceiling of €1,000,000
   In practice, the potential tax shelter should be approximately 1/8 of your earnings after tax and any distribution of dividends.
   
   
5. You will not be charged any fees, at any time, other than your subscription amount.

The risks of the tax shelter

The risks are summarised on pages 9 to 11 of the Prospectus and detailed on pages 13 to 21. This document has been approved by the FSMA but this approval should not be construed as a positive endorsement of the product. Should you have any doubts relating to these risk factors or whether this investment is suitable for your financial situation, please consult a financial and/or tax expert.

The tax benefit depends on the producer
For the tax advantage to be definitively acquired, the producer must comply with the provisions of the tax shelter legislation so that you receive the necessary tax certificate(s) within 4 years of your investment.
BNP Paribas Fortis Film Finance covers this risk by guaranteeing that the producer will provide you with the relevant tax certificate. 

We have put the necessary procedures and checks in place to ensure that projects are properly completed and generate the required spending in Belgium. If not, or if a financed project does not receive its tax certificate for another reason, BNP Paribas Fortis Film Finance guarantees that you will be indemnified.

The tax benefit also depends on you
It is essential, for instance, that your company has sufficient taxable profits in relation to the intended investment and recognises the investment in the manner required by law.

The tax benefit depends on your tax rate
The tax benefit and income described here apply to businesses subject to a 25% tax rate. The investor’s return could, however, be lower or even negative (in theory, as low as -15,80% if the investor is fully taxed at a rate of 20%). The remuneration payment may vary depending on the date and the term of the investment in the financial product.

Financial return may vary
The rate used for the financial return is generally known at the time of investment, but it may happen (in December and June) that the reference rate is not yet known when the contract is signed.
Financial remuneration for a project may be paid for less than 18 months if its tax certificate is issued before 18 months.

Investment risks

Aside from the risks associated with investing in a tax shelter, there are also the risks that come with any investment. In the interests of transparency, those risks involved are listed below:

• Risks associated with the producers and their operational capacity (such as their ability to shoot the films) and financial capacity (such as their ability to pay the scheduled interest).
• Risks associated with the issuer and their financial or competitive capacity. In this instance, the risk that the issuer will be unable to pay the amounts due to investors, or meet the obligations associated with the offered guarantees, as well as the risk that the issuer will no longer be able to find attractive audiovisual or stage productions.
• Risks associated with the offer and the issuer's capacity to execute it properly. In this instance, the risk that that offer may be unsuccessful, which could prevent it being finalised, if it is impossible to select a package of audiovisual and stage productions that meets the minimum conditions.
• Risks specific to the sector. This relates to risks that could prevent a film being completed, in particular. More generally, if there are unfavourable trends with Belgian productions, it might prove difficult to find productions that satisfy the issuer’s selection criteria.
• Miscellaneous risks, such as potential legislative changes, which would make it less attractive to invest in a tax shelter.

Find out more

Usefull links:

Prospectus (FR / NL)

Summary prospectus (FR / NL)

Art.194 of CIR (FR / NL)

Presentation (EN)

Not satisfied?

• Any complaint about our investment products or services should be sent by post to BNP Paribas Fortis SA – Complaints Department – Montagne du Parc 3, 1000 Brussels or by email to gestiondesplaintes@bnpparibasfortis.com or klachtenbeheer@bnpparibasfortis.com.
• If you are not happy with the proposed solution, you can send your complaint by post to Ombudsfin – Financial Services Mediation Service – North Gate II, Blvd du Roi Albert II 8 (Bte 2), 1000 Brussels or by email to ombudsman@ombudsfin.be.