SOFICA deduction replaced by a 40% tax reduction, increased under conditions

Article 102 of the 2006 Amending Finance Act turns the deduction from overall income granted for subscriptions to the capital of film and audiovisual financing companies (SOFICA) into an income tax reduction (Article 199 unvicies of the General Tax Code). The reduction equals 40% of the sums paid, capped at 25% of net overall income and €18,000; this rate is increased by 20% when the company undertakes to make at least 10% of its investments in production companies. It applies to subscriptions made from 1 January 2006 to 31 December 2008, so from the tax on 2006 income paid in 2007 (effective date set at 1 January 2007). The scheme has since been extended and its rates changed.