Belgian Cinema Punches Far Above Its Size, and a Tax Provision Is Part of the Reason

Jean-Pierre and Luc Dardenne have won the Palme d'Or at Cannes twice, for Rosetta in 1999 and L'Enfant in 2005, a record shared by very few directors. Their films are made in and around Liege, cast largely with unknowns, shot with a hand held camera close to the actor, and concerned almost entirely with people at the edge of the labour market. They have made that method into a recognised style.

The Flemish sector has developed on a different model, with stronger genre output, more television crossover and a commercial domestic audience that Francophone Belgian films rarely reach. The two halves of the country run largely separate film industries, with separate funding bodies, separate broadcasters and separate audiences, and cross the line less often than outsiders assume.

What both halves share is the tax shelter. Introduced in 2003, it allows companies to invest in the production of audiovisual work in exchange for a tax advantage, and it turned Belgium into an attractive co-production partner for a scale of film that would otherwise struggle to close its financing. A significant proportion of European art house cinema of the last two decades carries a Belgian co-producer for that reason.

The instrument has needed policing. It has been tightened repeatedly after abuse, the rules on what qualifies and how the benefit is calculated have been rewritten more than once, and the sector has learned to live with periodic uncertainty about the terms. It has survived every review, which is a fair indication of how much production would stop without it.

The result is a country with two film cultures, one international reputation built largely on social realism, and a financing structure that supports a volume of work no domestic box office could justify. It is a small industry that has made itself difficult to leave out of a European co-production.