France Modernizes Tax Incentives to Attract Hollywood Productions

France is poised to enhance its competitiveness in attracting Hollywood productions through a significant reform to its Tax Rebate for International Productions (TRIP). This change, approved by the French government and parliament, will allow expenses such as the salaries of non-European actors and hotel accommodations to qualify for a 30% tax rebate, increasing to 40% for films spending over €2 million ($2.3 million) on French visual effects. The tax credit is capped at €30 million ($35 million) per project and is expected to take effect pending final approval from the European Commission.

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Gaëtan Bruel, president of the National Film Board (CNC), emphasized the necessity of these changes, stating they are “indispensable” for France to compete for big-budget shoots amid a decline in global production volumes. The number of TRIP-approved productions fell to 55 in 2024, down from 100 in 2022, highlighting the urgent need for reform. Bruel's observations stem from his discussions with studio executives during a week-long visit to Los Angeles, where he noted that France's appeal as a filming location had diminished significantly.

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The reform was influenced by lobbying efforts from prominent figures in the film industry, including Netflix co-CEO Ted Sarandos and Paramount Skydance CEO David Ellison. Both executives played pivotal roles in advocating for the inclusion of actors' salaries in the rebate. Sarandos discussed the issue with French President Emmanuel Macron during the Choose France summit in May 2024, while Ellison raised it during his visit to Paris for a separate business matter.

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President Macron has been proactive in enhancing France's film infrastructure through his France 2030 initiative, which includes substantial investments in studio expansions and training programs. However, industry insiders noted that these efforts would be undermined without a modernized tax incentive structure.

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The arrival of streaming platforms like Netflix has significantly transformed the French film and television landscape over the past decade, leading to a doubling of annual production spending from €1.5 billion to €3 billion. Bruel highlighted successful collaborations on high-profile series such as “Emily in Paris” and “The New Look,” which have showcased the capabilities of French crews while meeting American production standards.

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Despite these advancements, Bruel warned of a “period of turbulence” for the sector, citing a contraction in the global market and increasing international competition. He argued that extending the rebate to cover actors' salaries is crucial not only for attracting foreign productions but also for sustaining the broader film ecosystem and economy in France.

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Industry leaders have expressed optimism about the reform, with Bruel stating that the changes are essential for revitalizing France's position in the international film market. The government’s commitment to modernizing the tax rebate is seen as a necessary step to ensure the success of the France 2030 initiative.

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• “Nowhere else have we doubled production capacity in five years, yet the feeling was that France 2030 would have been for nothing without an improved rebate.” — Industry Source

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This reform represents a strategic move by France to reclaim its status as a prime destination for international film and television productions, amidst evolving market dynamics and competitive pressures.

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