Sale Agreements by emm19002


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COUNTRY                     The Bahamas                                                       Barbados                                            PUERTO RICO                                                  Louisiana, USA                                           Ireland, United Kingdom
                       Bahamas Film Commission                                            Film Barbados Inc                               The Puerto Rico Film Corporation                           Louisiana Film & Video Commission                                    The Irish Film Board

                                                                                                                                                                                                The Louisiana Motion Picture Incentives Program -          Ireland's film financial incentives Section 481 (formerly
                                                                                                                                                                                                Passed in 2002; To allow film and video production in      Section 35) tax incentives have been central to the
                                                                                                                                                                                                Louisiana; To advocate the hiring of Louisiana technical   growth of film production throughout the 1990's to the
                                                                                                                                                                                                crew and talent; To support and encourage the use of       present. Section 481 has been extended to 2008 and
                                                                                                                                                                                                Louisiana equipment and services related to film and       from 2005, the cap on the level of investment which can
                                                                                                                                                                                                video production.                                          be raised is being increased from €10.48 million to €15
                                                                                                                                                                                                                                                           million, in addition other incentives are available to the
                                                                                                                                                                                                                                                           filmmaking community.

INCENTIVE   Given its tax-neutral platform, with no income, capital      All camera, grip and lighting gear, props, vehicles and   To cut some costs, productions can enjoy an exemption      1) Sales and Use Tax Exclusion - The new law grants          A tax deduction - called Section 481 Relief (formerly
            gains or corporate taxes, the Bahamas has already a          other industry equipment can be imported free of duty.    from the hotel room tax during the filming of the project. an exclusion from state sales and use tax (4%) until         Section 35) - is available to Irish investors who buy
            sound platform to provide specific incentives for film       There are no local taxes on foreign employees nor on      Puerto Rico also has the Law for the Development of the    January 1, 2007                                 The          shares in Irish film production companies. Because 80%
            producers who choose to shoot movies here or, possibly,      foreign productions. Local goods and services are         Film Industry, which offers a tax credit based on 40% of   production company will be granted the “exclusion” if it     of the amount invested can be written off for tax
            filming in multiple international locations. Currently the   subject to a 15% VAT (7.5% on hotel cost) but Film        the production costs paid to Puerto Rican residents for    reports anticipated expenditures of US$250,000 or more       purposes, the investor looks for a return on the net cost
            incentives already on offer were the absence of import       Barbados is able to claim this back for visiting          any movie that shoots 50% or more of its principal         from a checking account in a financial institution in        rather than on the full amount invested. This usually
            duties on film equipment and no location fees for            productions.                                              photography on the island.                                 Louisiana in connection with filming or production of        results in a contribution of up to 12% to the budget.
            government-owned properties.                                                                                                                                                      one or more nationally distributed motion pictures,
                                                                                                                                                                                              videos, television series, or commercials in the state of
                                                                                                                                                                                              Louisiana within any consecutive 12-month period.
                                                                                                                                   Law for the Development of the Film Industry - Act No. 2) Employment / Labor Tax Credit - The new law                   Individuals may invest up to €31,750 annually, 80% of
                                                                                                                                   362 of December 24, 1999                                   provides that until July 1, 2006, a motion picture           which can be written off for tax purposes. The net cost,
                                                                                                                                   A tax credit is granted to the investors in a Film Project production company is entitled to a tax credit for the       at current tax rates, is 66%. In simple terms, the Irish
                                                                                                                                   equivalent to 40% of budget items paid to Puerto Rico      employment of Louisiana residents in connection              Government underwrites 34% of the individual’s
                                                                                                                                   residents, up to 50% of the cash invested as equity in the with production of a nationally distributed motion           investment. Companies can invest up to €10,160,000
                                                                                                                                   project. 50% of the tax credit granted to the investor     picture, video, television series, or commercial made        annually, but not more than €3,810,000 in any
                                                                                                                                   may be made available to the investor upon investment if in Louisiana                                                   production. Any excess over €3,810,000 must be
                                                                                                                                   a completion bond or a letter of credit is obtained,       The credit is equal to 10% of the total aggregate payroll    invested in film productions with a maximum budget of
                                                                                                                                   including the Puerto Rico Secretary of the Treasury as     for residents employed in connection with such               €5,080,000. The net cost to a company is some 84% of
                                                                                                                                   one of the beneficiaries. The balance of the tax credit    production when total production costs in Louisiana          the amount invested at present.
                                                                                                                                   shall be available when a certified public accountant      equal or exceed US$300,000 but less than US$1 million        The amounts that can be raised in this way vary by
                                                                                                                                   appointed by the government certifies that the entire      during the taxable year. The credit shall be equal to 20%    project size: Up to 66% for films costing €5,080,000 or
                                                                                                                                   budget has been spent.                                     of the total aggregate payroll for residents employed in     less; Up to 55% for films costing in excess of
                                                                                                                                                                                              connection with such production when total production        €6,350,000 million with sliding scale adjustment of
                                                                                                                                                                                              costs in Louisiana equal or exceed US$1 million during       between 55% and 66% for films costing between
                                                                                                                                                                                              the taxable year. Note: The term “total aggregate            €5,080,000 and €6,350,000; Up to €10,480,000
                                                                                                                                                                                              payroll” does not include the salary of any employee         maximum for films with a budget over €19,050,000.
                                                                                                                                                                                              whose salary is equal to or greater than US$1 million.
COUNTRY                      The Bahamas                                               Barbados                                         PUERTO RICO                                                Louisiana, USA                                              Ireland, United Kingdom
                        Bahamas Film Commission                                    Film Barbados Inc                            The Puerto Rico Film Corporation                         Louisiana Film & Video Commission                                       The Irish Film Board
                                                                                                                                                                                    The credit may be applied to any income tax or                Most investors seek projects, which have the possibility
                                                                                                                                                                                    corporation franchise tax liability applicable to the         of securing pre-sale agreements that will give them a
                                                                                                                                                                                    motion picture production company. Provides that if the       reasonable return on their net investment when the film
                                                                                                                                                                                    motion picture production company is an entity not            has been delivered. Section 481 investment is only
                                                                                                                                                                                    subject to income or franchise tax, the credit shall flow     available for the production spends in Ireland. A
                                                                                                                                                                                    through its partners or members as follows:                   minimum of 10% of the work on the production of the
                                                                                                                                                                                    (a) Corporate partners or members shall claim their share     film must be carried out in the State.
                                                                                                                                                                                    of the credit on their corporation income or corporation
                                                                                                                                                                                    franchise tax returns. (b) Individual partners or members
                                                                                                                                                                                    shall claim their share on their individual income tax
                                                                                                                                                                                    returns. (c) Partners or members that are estates or trusts
                                                                                                                                                                                    shall claim their share of the credit on their fiduciary
                                                                                                                                                                                    income tax returns.
                                                                                                                                                                                    Any unused credit may be carried forward no more than
                                                                                                                                                                                    10 years from the date the credit D7was earned.
                                                                                                                                                                                    3) Investor Tax Credit - The new law grants a tax             A typical structure would be as follows: An Irish
                                                                                                                                                                                    credit against state income tax for taxpayers                 production company is established to make one film only.
                                                                                                                                                                                    domiciled and headquartered in Louisiana                      It is commissioned to produce a film for an agreed fee,
                                                                                                                                                                                    The objective of this tax credit is to attract private        payable on delivery and acceptance, with a further
                                                                                                                                                                                    investment for the production of nationally distributed       entitlement to either a net profit or adjusted gross
                                                                                                                                                                                    feature length films, videos, television programs, or         position. For example a pre-sale fee of about 82% of the
                                                                                                                                                                                    commercials made in Louisiana, in whole or in part for        investor funds raised together with an advance of the
                                                                                                                                                                                    theatrical or television viewing or as a television pilot.    remainder of the budget is not unusual. The structure can
                                                                                                                                                                                    The investor shall earn the tax credit at the time of such    also provide a cash-flow benefit to the producer.
                                                                                                                                                                                    investment made in a state-certified production. If the
                                                                                                                                                                                    total base investment is greater than US$300,000 and
                                                                                                                                                                                    less or equal to US$8 million, each taxpayer shall be
                                                                                                                                                                                    allowed a tax credit of 10% of the actual investment
                                                                                                                                                                                    made by that taxpayer. If the total base investment is
                                                                                                                                                                                    greater than US$8 million, each taxpayer shall be
                                                                                                                                                                                    allowed a tax credit of 15% of the investment made by
                                                                                                                                                                                    that taxpayer. In the event the entire credit cannot be
                                                                                                                                                                                    used in the year earned, then any remaining credit any be
                                                                                                                                                                                    carried forward and applied against income tax liabilities
                                                                                                                                                                                    for the subsequent 10 years.

VALUE      Without a tax incentive program, the Bahamas provided Since its inception 5 years ago, Film Barbados Inc has   It was reported that the film industry has contributed    The program has helped generate US$555 million in             The most recent IBEC report shows that despite a slow
           free hotel accommodation to the Production Companies generated US$5 million in direct foreign earnings to      US$22.8 million to the local economy (including goods     movie and television projects in Louisiana since 2002,        start for production 2004 due to the weakened US dollar,
           with a value of US$1.5 million and generated earnings in Barbados through offshore productions shooting.       & services) in 2003.                                      according to the Governor’s Office of Film and                there was a high level of audiovisual production in
           the amount of US$20.9 million from 3 movies in 2004.                                                           The number of filming days jumped to 437 in 2003 from     Television.                                                   Ireland.
                                                                                                                          335 in 2001, a 30% increase.
           Also the proximity of the Bahamas to Florida offers value in                                                   It supported the creation of 6,105 jobs in 2003, a 163%   The Money - The Louisiana film and TV and video tax           The Total Overall Output from Audiovisual Productions
           accessibility to goods and services from the mainland. For example,                                            increase over 2001 and 66% more than were generated       credit program spurred huge growth in production              (which include Feature Film & Major TV Dramas,
           lab & equipment.
                                                                                                                          in 2002.                                                  dollars spent in Louisiana. Here's how it has grown:          Independent TV Productions, Animation):
                                                                                                                                                                                    2002 - US$20 million.                                         2001 - EURO 259.0 million.
                                                                                                                                                                                    2003 - US$210 million.                                        2002 - EURO 190.0 million.
                                                                                                                                                                                    2004 - US$335 million.                                        2003 - EURO 320.2 million.
                                                                                                                                                                                    Source: Governor's Office of Film and Television.             2004 - EURO 159.0 million.
                                                                                                                                                                                                                                                  Overall net gain of EURO 30.0 million to the Irish
Hotel Taxes: 10%
Service Charge, 10%
Hotel Room Tax.
Value Added Tax (VAT)
15% vat is charged on
goods and services

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