I'll forward you two materials
1) HOW TO INVEST - A REAL EXAMPLE
2) EXPLANATION ABOUT THE LAW
Hope it helps.
FIBRA CINE VIDEO - BRASIL has the distinct pleasure of presenting the project "CHATEAUBRIAND", a Marcos Manhaes Marins' screen-play. This production is planned to be a full-length motion picture partially financed by the Ministry of Culture by means of the AUDIOVISUAL LAW (Certificate number SDAV 079A/96 and the LAW OF INCENTIVE TO CULTURE (PRONAC 95-RJ-0256-222).
The Producer is looking for partners, investors, co-producers and associated producers to start the pre-production period. Associated producers may invest in services supply and or equipment like scenery, shooting equipment, cranes, sensitive material, development, shooting studios, audio studios, etc... All prospective national and international partners will be entitled to derive benefits from Brazilian Government incentives (Federal Law of Culture).
The production will take place in the Brazilian state of Rio de Janeiro, São Paulo, Paris, London and Paraíba (the mother land of Assis Chateaubriand).
"CHATEAUBRIAND" tells the life of Assis Chateaubriand, the man who brought Television to Brazil. Born in 1891 in the state of Paraíba, he gets a degree as Lawer at Recife's University and goes to Rio de Janeiro, becoming one of the most important newspaper's owner, with the power to make presidents such as Getulio Vargas, and destroy their reputation as well. A man essentially rude, in despite of his studies, stronger than Society, who fights against hypocrisis of the world, who fights to be respected even being Brazilian and somehow ugly, but turns out to be not capable of understanding and respect his wives and his own children.
More about that in the official site: http://www.chateaubriand.com.br
The Law 8685/93, passed by the Congress, created fiscal incentives for everybody, (including corporations) that are entitled to obtaining Audiovisual Investment Certificates. The Investment Certificates are proof of share ownership for commercialization of a cinematography work issued and distributed under the supervision of the Ministry of Culture and registered on the Securities Commission - SC.
The Investment Certificates of the project BOLERO have the total value of U$ 3,000,000.00 (Three million dollars).
Three hundred investment shares worth U$ 5.00 (five dollar) a piece, which is equivalent to 30% of the producer's net earnings, have been offered to the market.
HOW TO INVEST
1. IMMEDIATE FINANCIAL GAIN (just to enterprises with a BRANCH IN BRAZIL)- The investment can be entered as "OPERATING EXPENSES" by means of an adjustment to net profit (LALUR) and is fully deductible (this deduction being limited to 3% of the Income Tax owed - according to law 9323/96).
The corporation earns at the moment of the investment 25% of the value invested, since income tax in Brazil is 25% on the profit and the profit will be reduced by the amount of money invested, as allowed by Audiovisual Law.
If, for example, the corporation invests U$ 160,000.00 (a hundred thousand dollars), it would be entitled 3% of the investment quota over the producer's gross revenue(tickets and tv sales, less costs of distribution) and, besides entering the invested value as "OPERATING EXPENSES"(25% of immediate gain=U$40.000), deducts fully 100% from the invested value in its income tax return.
2. APPLICATION YIELDS - During the first FIVE years, investors will have participation in 30% of the producer's net income, which includes gains from box office, sales in Brazil and abroad, sales for commercial and cable television, and sales of videotapes and games.
3. INSTITUTIONAL RETURN - The investors will have their names on the acknowledgements list, on TV showings, and on the acknowledgements list of videotapes. Depending on the value of the investment, investors will have their names and/or logos printed on the opening credits of the film, on promotional posters, in magazine and newspaper's advertisements, on billboards and television.
With an investment equal or greater than U$ 1,000,000.00 (one million dollars), the investor will be given the right to participate with his/her trademark in all the promotional material, thus withholding 10% of the profit.
4. POSSIBILITY OF MERCHANDISING - Depending on the value of the investment, investors' trademarks or products may be subtly introduced along the film, appropriately highlighting the product.
5. INDIVIDUALS - The investment for physical persons is basically the same as that for corporations.
Legislation: Law 8685/93 - Decree number 974/93 - I.N 56/94 - I.N 62/95 - Law 9323/96.
Besides being an opportunity offered by the FEDERAL GOVERNMENT and by the MINISTRY OF CULTURE (so that individuals and corporate taxpayers can effectively participate in a cinematography production by means of the so called fiscal resignation), we are confident that the project CHATEAUBRIAND is also an excellent opportunity for investment. First, because corporations, industries or individuals become partners in a cultural project; second because the entire investment is fully (100%) deductible from income tax owed; apart from that, once an investor is granted the certificates of investment, he can still profit by means of the insertion of the work in the national and international market.
CHATEAUBRIAND is a FIBRA CINE VIDEO - BRASIL Production
BRAZILIAN TAX INCENTIVES
FOR AUDIO VISUAL WORKS
For several years our office has been rendering Services (*2) to the National and International Film Industry (Producers, Distributors, etc.), namely giving legal, comercial and negotial assistance to Feature Films Productions in Brazil (*3) and licensing of distribution rights, Theatrical; non-Theatrical; Television (Free TV, Pay TV, Cable, Pay-per-view); Video (HomeVideo, Rental, Sales Through, etc.)
After the issuance of Audiovisual Law nr. 8685 of June 20, 1993, we have also specialized in the procedures to utilize the mechanisms of such Law in order to make possible their application into Brazilian Cinematographic Audiovisual works, as defined by Law.
We are since the very beginning, even prior to its issuance, giving a close attention to every detail of Law 8685/93 and all the following legislation, as well as to the interpretation of their actual application with the authorities in charge at the Secretary for the Audiovisual Development of the Ministry of Culture. Mainly, Audiovisual Law nr. 8685/93 and following legislation which rules its application were issued to support and develop the Brazilian Films Industry. From then on Brazilian Producers have been presenting their Projects and applying for the benefits of such legislation, and several feature films are being already produced utilizing such mechanisms.
Basically, Audiovisual Law 8685/93 granted Tax Incentives which should be applied by the tax-payers in Brazilian Cinematographic Audiovisual works, not necessarily feature films. The incentives are defined in two articles, nrs. 1 and 3, of the above mentioned Law. Article 1 - establishes that Brazilian physical persons and juridical persons can deduct from their income tax to pay, 3% (three per cent), provided this deduction is deposited in a special account at BANCO DO BRASIL S.A. and utilized to buy Audiovisual Investment Certificates for a determined Production/Film of their own choice, among those Projects which must be already approved by the Secretary for Audiovisual Development of Ministry of Culture (SDAV-MinC).
The issuance of these Certificates are ruled by the Stock and Exchange Committee and the buyers are entitled to a participation on the film results according to the offer of each Project. Article 3 - (Combined with articles 4 and 5 of Decree 974/93 that regulates Law 8685/93) Establishes that any foreign Producer, Distributor or Intermediate who receives any royalties and/or payments of whatever nature, derived from the exploitation, sale or licensing of foreign audiovisual works (Theatrical, Television, Video, Transmission of Events - Sports, shows, etc, in Brazil, can deduct 70% (seventy per cent) from the withholding tax applicable to any credits or remittances of such royalties and/or payments, provided this deduction is deposited in a public account to be utilized in a Project of a Brazilian Producer for an Audiovisual work (feature film, series, etc.) and this Project is approved by the SDAV-MinC above mentioned.
Normally the withholding tax is of 25% (twenty-five per cent) on the royalties or payments, credited or executed, and once the decision is to utilize the 70% (seventy per cent) under the terms of Law 8685/93, from the date of each deposit, the foreigner has 180 days to elect a Project and allocate the deposited amounts to it. The foreign Producer, Distributor and/or Intermediate may choose his own Project and a contract is signed with the Brazilian Producer defining, case by case, their participation and rights (first negotiation/first refusal for distribution, vehicles, territories, etc.).
The limit of deposits in each Project is of approximately US $3 million, and this amount can not represent more than 80% (sixty per cent) of the whole Budget. It is really a good opportunity to participate on potentially good films, with low budgets and at no real cost. And, adding to all this, giving a support to the Brazilian policy to develop the Audiovisual Movie Industry
Some of the Brazilian Projects : "O QUE E’ ISSO COMPANHEIRO?" by BRUNO BARRETO based on the book of Fernando Gabeira on the political kidnapping of the American Ambassador in Brazil, John Elbrick. “TIETA” by CACA DIEGUES, based on the book of Jorge Amado; "CHATEAUBRIAND, CABEÇA DE PARAÍBA", by MARCOS MANHAES MARINS, based in a original screenplay on the life of Assis Chateaubriand, the communications mogul in the first half of this century.
More info(still in Portuguese) at:
http://www.cinemabrasil.org.br/leis.html and at: http://www.cinemabrasil.org.br/laws/
Cultural Project CINEMA BRASIL NA INTERNET
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