Passed last year, France's "international tax credit" has already benefited 29 movies, mostly Hollywood productions.

Woody Allen is one of many US directors who filmed in France this year

PARIS - In January, Sherlock Holmes 2 will begin filming in Paris and Strasbourg. Directed by Britain's Guy Ritchie, the film is just the latest to receive a new tax credit offered to foreign filmmakers who choose to shoot in France. Passed in 2009, the "international tax credit" offers a 20% tax deduction to productions that spend at least one million euros in France.

Beyond Ritchie, famous American directors like Clint Eastwood (Hereafter), Martin Scorsese (The Invention of Hugo Cabret) and Woody Allen (Midnight in Paris), have also set up their sets in France this past year, and taken advantage of these tax breaks. The credit has a cap of four million euros, and can only take into account a small portion of stars' paychecks.

In total, 29 movies were granted the go-ahead for the fiscal measure, according to the promotional organization Film France. Hollywood is the number one beneficiary, with the UK a distant second. According to Film France, the measure could cost about 20 million euros to the French Ministry of Finance, but should help generate about the same amount to the state in other tax revenues.

Film France estimates that 114.2 million euros have been spent by these productions in the country. Shoots for Inception and The Tourist spent just under half their total budgets in France (54.8 million euros).

Animated movies have been a boon, bringing in some 60 million euros this past year. France had already established a worldwide reputation for special effects and 3D thanks to companies like Mac Guff, Mikros and Buff, but is even better positioned with this new tax incentive. Universal Studios, which produced Despicable Me, had Mac Guff create all the special effects.

Tax credit, job creation

The ultimate hope is that the tax credit creates French jobs. "About 50 or 60 % of spending in France is linked to paychecks. Tens of thousands of work days were created by the international tax credit," says Patrick Lamassoure of Film France. Technical aspects, like postproduction, set and truck rentals have also benefited.

To attract foreign filmmakers, France has long counted on its cultural and historical appeal. Ile-de-France, the region where Paris is located, is also looking to expand foreign filmmaking in the capital. Olivier-Rene Veillon of the regional film commission says another policy for generating business has been to lower rental prices for historical landmarks.

With 200 movies a year, France is generally considered one of the world's major film producers, which helps reassure foreign directors of the resources available. But competition is fierce. Since 2005, five countries – Germany, Italy, the Czech Republic, Malta and Hungary – have also created fiscal incentives to attract foreign films.

Read the original article in French