Definition and legal classification of the film levy
Die Film levy is a statutory, earmarked levy in Germany, imposed on companies in the film industry, particularly film distributors, cinema operators, video program distributors, and television broadcasters. It serves to finance German film productions and is collected by the Filmförderungsanstalt (FFA), a federal institution under public law. The legal basis for the film levy is set out in the Filmförderungsgesetz (FFG). The following explains comprehensively the key legal aspects, collection, earmarking, and the most important terminology.
Legal basis of the film levy
Filmförderungsgesetz (FFG)
The FFG forms the central legal basis for the collection and use of the film levy. The relevant provisions are found in particular in Sections 66 et seq. of the FFG. With the levy, the legislature pursues the objective of strengthening German cinema productions in their cultural and economic significance and enhancing their competitiveness in an international context.
Liable parties
Circle of liable parties
The group of companies subject to the levy is sufficiently specified in the FFG:
- Cinema and movie theater operators: They are required to pay a levy on the gross revenue from ticket sales.
- Video program lessors and distributors: Providers who put videograms on the market must pay the levy on rental revenue or sales.
- Television broadcasters: Broadcasting entities airing feature films are required to pay the levy on the net proceeds from the marketing of the respective works.
- VOD providers (Video-on-Demand): Following reforms of the FFG, certain digital services are also subject to the levy, provided they exploit films to a significant extent.
Exceptions and exemptions
There are statutory exceptions from the obligation to pay the levy, for example for charitable film screenings or minor revenues that fall below certain thresholds. Likewise, companies offering exclusively non-film content are exempt.
Calculation and amount of the film levy
Assessment basis
The calculation of the film levy is based on the gross revenues (for cinemas), net proceeds (for television broadcasters), or turnover (for video program providers). The amount of the levy is staggered by percentage and depends on revenue and company type:
- Cinemas and movie theaters: The levy is gradually set between 1.8% and 2.3% of gross box-office receipts.
- Video program providers: The percentage levy is regularly between 1.8% and 2.3% of turnover.
- Television broadcasters: The amount varies depending on the proportion of exploitation of feature films and usually amounts to 2.5% of the net proceeds achieved therefrom.
- VOD services: Here, too, graduated percentage rates apply depending on revenue and type of exploitation.
Special provisions
For individual companies with particularly high turnover, special provisions on maximum amounts and graduations apply. In addition, exemptions and thresholds exist below which there is no obligation to pay the levy.
Earmarking and use of the film levy
The film levies collected are used by the FFA for earmarked purposes. The funds flow exclusively into the promotion of German film-making. The scope of support includes in particular:
- Production funding for German feature films
- Distribution and sales support
- Project development
- Support for emerging talent and screenwriting
- Subsidies for expanding cinema infrastructure
The earmarking is intended to ensure that the levies do not flow into general budgets but are dedicated solely to the promotion of film production in Germany.
Collection, payment, and control
Collection procedure
The FFA is, by law, responsible for collecting, managing, and monitoring the film levy. Liable companies must regularly, usually quarterly or annually, prepare statements and pay the levy to the institution. There is a comprehensive duty to provide information and cooperate.
Audit and sanctions
The FFA is authorized to verify the information provided by the liable parties and to conduct audits. In the case of incomplete or late information, late payment surcharges and coercive fines may be imposed. Administrative offenses and violations of the FFG are subject to fines.
Legal developments and conformity with European law
Adjustments to the Filmförderungsgesetz
The FFG is regularly adapted to changing economic and media requirements. With digitization and the emergence of new distribution channels (such as video-on-demand), both the group of liable parties and the modalities of the levy have been continually expanded.
Classification under European law
The film levy is compatible with European state aid law, as it is recognized as permissible cultural support under Art. 107 TFEU. The European Commission has repeatedly approved the provisions on film funding and the related levies.
Literature and further legal sources
- Legislation: Filmförderungsgesetz (FFG)
- FFA administrative guidelines
- Decisions and opinions of the European Commission
- Significant publications on film funding and media law
Summary
The film levy constitutes a central element of financing for the German film funding system. It is comprehensively regulated by law, collected by a federal institution, and subject to detailed provisions regarding earmarking, calculation, and control. Through ongoing legislative adjustments, it takes account of current developments in the media landscape and complies with applicable European legal requirements.
Frequently Asked Questions
When is a film levy legally mandatory?
The obligation to pay a film levy in Germany is basically governed by the Filmförderungsgesetz (FFG). According to Section 66 FFG, companies that exploit films in Germany—by means of public screenings, television broadcasts, or through video-on-demand services—are required to pay the so-called film levy to the Filmförderungsanstalt (FFA). This levy finances various measures supporting the German film industry. The obligation is triggered as soon as a feature film made in Germany is commercially exploited domestically. The levy obligation includes both domestic and foreign companies, provided the exploitation takes place within the Federal Republic of Germany. Exceptions exist, for example, for charitable screenings or certain educational purposes, which are expressly excluded by the regulations.
How is the amount of the film levy calculated legally?
The amount of the film levy is determined by the assessment basis stipulated in the FFG and mainly depends on the type of exploitation (cinema, video-on-demand, television, video sales, etc.) and the annual turnover of the liable company. Under Section 67 FFG, a certain percentage is calculated from the gross revenue of ticket sales for cinema operators, while different percentages are applied to the relevant net turnover for video providers and television broadcasters. The exact rates, as well as any exemptions and graduations, are regulated by law. So-called de minimis thresholds and revenue minimums are also stipulated, under which an exemption is possible. Companies are required to disclose their revenues annually and to calculate and pay the resulting levy themselves.
What are the consequences of violating the levy obligation?
Anyone who does not comply with their statutory obligation under the FFG in full or on time must expect various legal consequences. In addition to payment of the outstanding amounts, the FFA may impose default interest and, in individual cases, late payment surcharges. The FFA is also entitled to demand the necessary documents and turnover statements and, under its audit rights (Section 73 FFG), to inspect business records. In case of serious or repeated violations, a company may be excluded from participation in FFA support measures. In addition, intentional or negligent false declarations may be criminally relevant and result in prosecution.
Who is liable to pay and are there any exemptions?
Liable parties within the meaning of the FFG are natural and legal persons as well as non-legal partnerships that commercially exploit feature films within Germany. This includes in particular cinema operators, television stations, video-on-demand platforms, and video rental companies. As a rule, both German companies and foreign companies marketing films in Germany are liable. Exemptions exist inter alia for charitable institutions, public sector bodies, and certain educational institutions, provided their film screenings are not for commercial purposes. For works with low commercial success, an exemption may also be provided, subject to the statutory de minimis limits.
How does the legal registration and declaration of the film levy work?
The registration of the film levy is submitted annually by means of a self-declaration to the FFA. Liable companies are required to report their relevant revenues electronically or in writing within specified deadlines. The required deadlines are set out in the FFG and its implementing regulations. Companies must keep all necessary documents, such as revenue statements, contracts, and, where applicable, tax assessments, available to enable a verifiable declaration. After reviewing the documents, the FFA issues a notice of the amount of the levy to be paid. Legal objection to this notice can be raised within a specified period.
What audit and control rights does the Filmförderungsanstalt FFA have?
The FFA is entitled under Section 73 FFG to comprehensively review the accuracy of the reported revenues and the resulting film levy. This includes the right to request relevant documents and to inspect the accounting records of the liable companies. The FFA can order audits and engage external auditors. To ensure proper compliance with reporting and payment obligations, the FFA may, in cases of suspicion or irregularities, require additional evidence or a sworn statement. If a company refuses to cooperate, this may be regarded as an administrative offence.
What legal remedies are available in disputes regarding the film levy?
Against FFA decisions regarding the assessment or recovery of the film levy, the general administrative legal remedies are available. After delivery of a levy notice, an objection can be filed within the statutory deadline. If the objection is not upheld, an action can be brought before the administrative court. Further appeals to higher courts may be possible, provided the respective requirements for admission are met. For specific legal questions, such as basic liability or the calculation of the levy, the Federal Administrative Court can also be approached. At the same time, there is the option of obtaining legal advice or a binding opinion from the FFA in advance.
