By Emmanuel Legrand
Tax credit schemes have been seen as one of the most efficient and cost-effective ways to boost investment in creative projects in Europe. Countries like France have perfected the system, with tax credit schemes for record labels and live music promoters. The purpose of the system is to allow companies that invest in creative projects to offset some of their expenses through tax deductions.
In France, the Parliament has voted in December to extend the tax credit on phonographic production (CIPP) until December 31, 2024, and has raised the rates applicable to the sector. Record labels can now offset 30 to 40% of their investment in creative projects, up from 15% to 20%, and the investment ceiling has been raised from €350,000 to €700,000, with a maximum tax credit per company raised to €1.5m. In addition, the Parliament voted to include record labels' video investments as eligible for tax credit.
The live performance tax credit (CISV), applicable to concert production companies, has also been extended until the end of 2024. The Parliament has voted to include into the scheme investments in the recording of the shows to take into account the development of livestreaming events.
Publishers express bitterness
However, the request from music publishers, through their trade body CSDEM, to introduce a specific tax credit scheme for music publishing has been denied a second time by the National Assembly, even thought it was voted favourably earlier this month by the Senate. "We all agree on the need to help this sector and no one is indifferent to its economic problems," said Laurent Saint-Martin, general rapporteur of the Finance Committee, but he added that giving additional tax breaks when public finances are challenged is not appropriate.
CSDEM said the news that the proposal was discarded by the Parliament was met with "bitterness" by its membership. The Paris-based organisation added: "Faced with this incomprehensible decision and convinced of the legitimacy of their request, music publishers will continue to explain, in particular to government representatives, the specificities of their business."
CSDEM said it will continue to advocate for the scheme throughout 2021, noting that "other tax systems have been put in place or strengthened in the cultural and musical fields. In all consistency, the consideration of music publishers by the government should evolve."
Important benefits for Italian labels
Meanwhile, in Italy, the Senate voted the approval of the Ristori Decree, which extended the tax credit for the recording industry from €200,000 to €800,000 over a three-year period starting in 2021. Italy's music tax credit, introduced in 2013, is based on the French model, explained Enzo Mazza (pictured, below), CEO of music trade organisation FIMI. It provides for a tax credit to the extent of 30% of the costs incurred for the development, production, digitalisation and promotion of phonographic or videographic music recordings.
Mazza said the changes made in 2020, first by an August decree and now with the Ristori decree, have lifted the limits of three works and a cap of €200,000 per three-year period. These restrictions, he said, limited the scope of possible investments by record companies. In addition, the overall spending limit was raised from €4.5m to €5m.
"It is a particularly important measure to ensure the continuity of Italian record production in the post-pandemic and I am sure that companies will receive important benefits from the revision of this tax measure, obtained thanks to the work of the majority and opposition in addition to the contribution from the Minister of Culture and the Minister of Finance," said Mazza.
Post a Comment
Note: Only a member of this blog may post a comment.