1°: Equity financing of cinematographic or audiovisual works

For the assessment of income tax or corporation tax, cash subscriptions to the capital of limited companies subject to corporation tax under the conditions of ordinary law and whose sole activity is the capital financing of approved cinematographic or audiovisual works are entitled to the tax reduction provided for in Article 199 unvicies. .

The approval provided for in article 238 bis HE is issued by the President of the Centre national du cinéma et de l’image animée to original French-language works, as defined in the decree issued in application of law no. 86-1067 of 30 September 1986 relating to freedom of communication, of the nationality of a State party to the European Convention on Cinematographic Co-production done at Strasbourg on 2 October 1992…

The companies defined in Article 238 bis HE must make their investments in the form of: a. Subscriptions to the capital of companies that are subject to corporation tax under ordinary law and whose sole activity is the production of cinematographic or audiovisual works falling within the scope of the authorisation provided for in the aforementioned article. b. Cash payments made under a production association contract. This contract must be…

The shares subscribed for must be in registered form. No single person may hold, directly or indirectly, more than 25% of the capital of a company defined in article 238 bis HE. This last provision is no longer applicable after five years have elapsed since the first approved capital subscription was actually paid. No capital increase may be approved under the conditions mentioned in article 199 unvicies when the 25%…

The companies defined in Article 238 bis HE may not benefit from the scheme provided for venture capital companies by l’article 1er-1 de la loi n° 85-695 du 11 juillet 1985, portant diverses dispositions d’ordre économique et financier, ni du régime prévu en faveur des sociétés unipersonnelles d’investissement à risque mentionnées à l’article 208 D.

In the event of non-compliance with the condition of exclusivity of their activity, the companies defined in Article 238 bis HE must pay the Treasury compensation equal to 25% of the fraction of the capital that has not been used in accordance with its purpose, without prejudice to the application of the provisions of article 1649 nonies A of the French General Tax Code. The amount of this indemnity is…

Capital gains realised on the disposal of shares in a company defined in article 238 bis HE as well as those withdrawn from the redemption by the said company of its own shares are subject to the rules provided for in article 150-0 A without prejudice to the application of the provisions of 4 of Article 199 unvicies.

In the event that the company is dissolved or its capital is reduced, the Minister for the Economy, Finance and the Budget may order the tax reduction provided for in article 199 unvicies the year in which it was made.

A decree sets out the procedures for applying articles 238 bis HE to 238 bis HL, in particular the procedures for issuing approvals, reporting obligations and, where applicable, the standard clauses of the production association contract (1). (1) Annex III, art. 46 quindecies A to 46 quindecies F.