During the debates at the French parliamentary that led to the adoption of the 2026 finance law, the line production companies of the cinematographic and audiovisual sectors were stirred up by the attempt to resume or diminish the international tax credit managed by the French National Centre for Cinema (CNC).

This episode is an opportunity to focus on the contractual framework of line production, as well as on the French tax measures essential to this part of the audiovisual sector.

An essential contractual framework

Once the development and financing of a project is secured, its production requires a significant amount of organization, whether it is managed by one of the co-producers or by a dedicated service provider. When no funding is obtained locally, apart from the tax advantage that we will detail below, a line production services agreement is concluded with a dedicated service provider on which we focus.

While drafting a production services agreement, it is necessary to adapt to the specificities of each project and the scope of the missions entrusted to the line producer.

The agreement must define the terms of collaboration between the delegate producer and the line producer, which may be more or less flexible depending on the relationship between the parties. The wording can then be very strict about decision-making with systematic validation by the delegate producer or, allow the line producer freedom on certain decisions. On the line producer’s side, it is necessary to limit the scope of his missions so that it corresponds to its the quote.

Although it is generally up to the delegate producer to make all the decisions, it is necessary to allow the line producer to make minor decisions for the proper management of production, and the adaptation often necessary during production. In this context, the delegate producer ensures that the requirements of the financial partners are respected – while the line producer must ensure that he is not held liable for delays, or for budget overruns that are not the result of his actions, and in particular in the event of an express request from the delegate producer.

Usually, the line producer is responsible for managing the organization of the shooting and for carrying out the corresponding negotiations with the service providers and technicians, under his responsibility. Nonetheless the hiring of actors may be a point of discussion and can be the responsibility of one or the other, depending on the country of residence of the actors. It should be noted that in the context of international projects, the parties will also have to organize the issue of visas and work permits for foreign participants.

Financial provisions are particularly important and should include the production budget entrusted to the line producer, the conditions of remuneration of the latter, the cashflow schedule, the situation regarding any overruns that may occur and the sharing of the savings that can be made. The drafting of these provisions has a strong impact on the balance between the parties and must be the subject of sustained attention during negotiations.

Among the points of attention are the provisions relating to the establishment of production accounts by the line producer, which will have to comply with the requirements of the financial partners, and those relating to obtaining a tax credit for the benefit of the production, the conditions of which require good collaboration between the Parties.

Interesting but regulated tax credits

As stated above, the recent parliamentary debates for the adoption of the 2026 French finance law have reshuffled the cards of line production on French territory. Initially, an amendment proposal provided for a reduction in all rates by half, but this was cancelled at the last minute, as lobbying by professional organisations in the sector saved the attractiveness of these tax credits at the last minute.

However, an unprecedented measure has been adopted, integrating the remuneration of non-European performers, which were not considered, into the basis for calculating the tax credit.

CNC is responsible for managing tax credits, one of which is granted to the line producer: the international tax credit, or C2I, established in Article 220 quaterdecies of the French General Tax Code. This C2I therefore concerns projects of foreign initiative to be produced in France in whole or in part, and is therefore aimed at productions carrying out their shooting, visual effects work, animation work, among others, in France.

In order for a line producer to benefit from C2I, the criteria for the eligibility are set by the CNC, with the tax credit benefiting both cinematographic and audiovisual works, fiction or animation only, which meet the following conditions: not to benefit from financial aid for production from the CNC; reach a minimum of €250,000 in eligible expenses; proceed to a minimum of five days of filming on French territory.

In addition to these very pragmatic criteria, there is a more interpretive one, as the project must include « elements related to French culture, heritage or territory« , as stipulated in the General tax code. This assessment is based on cultural scales established and controlled by the CNC, such as a certain number of scenes taking place in France, characters being of French nationality or French-speaking, whether a part of the plot is interested in French history or its artistic heritage…

C2I has a general rate of 30% of the total amount of so-called eligible expenditure; These are also listed by the legislator, and relate in particular to the remuneration of authors, performers or filming staff, transport, accommodation or catering expenses, or expenses related to technical service providers. This rate may be increased but is in all cases capped at €30 million. 

It should be noted that the production of a work in France may also entitle, under certain conditions, to the benefit of other tax credits: the cinema, audiovisual or video game tax credits.

As regards the first two regarding cinema and audiovisual productions, it should be emphasised that they can only be requested by the line producer, who will obtain payment if necessary.

Thus, in view of the many legal criteria required to obtain tax credits and the necessary attention when drafting a production services agreement, it is highly recommended to seek advice from a specialized lawyer in order to approach such organization and negotiation