Is this true?From what I understand, the reason Uwe boll can get away with committing mass murder of brain cells through his crappy movies is because of a loophole in Germany in regards to raising money for films. Apparantly, and correct me if I am wrong (which I might be), his backers pay Uwe money for the film, which they can get as a tax right off. So really, it doesn't matter if the movie flops, because no one really loses any money.
So this is why Uwe boll get's the license on making movies
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reefsurfer
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So this is why Uwe boll get's the license on making movies
.. based on games.
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SplishSplash
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reefsurfer
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[xeno]Julios
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I still don't understand all this shit
if i'm an investor, and i give you a million dollars to make a flop, how is that going to benefit me or you?
sure i may be able to write off that million dollars off from taxation, but how can the benefits of writing off a million dollars of taxation outweigh the actual million dollars?
i posted these questions in another thread, but nobody seemed to be able to answer it...
if i'm an investor, and i give you a million dollars to make a flop, how is that going to benefit me or you?
sure i may be able to write off that million dollars off from taxation, but how can the benefits of writing off a million dollars of taxation outweigh the actual million dollars?
i posted these questions in another thread, but nobody seemed to be able to answer it...
thank you for that vital level of extra clarification.SplishSplash wrote:More likely because he made that loophole famous.Is it true that the germans are looking at changing the law because of uwe boll's anti-talent assault on cinema?
looked it up and there are plans to get rid of 'Medienfonds' - but they're more inspired by hollywood using german investors than the jets of pebbly arsewater uwe boll commits to film - also, the law may not change just yet because the german parliament have other things to worry about.
jules, try this:
http://www.slate.com/id/2117309
might explain things.
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[xeno]Julios
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tx - i still don't get it at all though - i don't have a very comprehensive understanding of how financial systems work.
Can someone just explain it to me in a way that doesn't presuppose any understanding of tax shelter, tax deductions, etc.?
My problem is understanding where the damn money comes from!!
It can't just magically appear - and if it comes from someone, how do they profit if the movie flops?
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IW Coriolis
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I think it works like this:
Most years you make $1 million, but this year you somehow made $3 million. Maybe you're in a business cycle where your profits are concentrated every few years; I know that game development is kind of like this for individual studios.
Anyway, you're going to pay taxes on all that money. The tax dodge doesn't change this. But, it does change when you pay those taxes. If you put $1 million of that $3 million into a movie, you get a $1 million tax deduction this year, so that you only pay taxes for the $2 million bracket. You make back your investment of $1 million another year, in which you only made $1 million, so you are again in a lower tax bracket.
So, you still pay taxes for the full $2 million extra you made, but you did it in a lower tax bracket over 2 years. The money you didn't spend in taxes counts as a profit. It's not free money, it comes out of the pockets of the governments that put the loopholes in their tax laws.
Most years you make $1 million, but this year you somehow made $3 million. Maybe you're in a business cycle where your profits are concentrated every few years; I know that game development is kind of like this for individual studios.
Anyway, you're going to pay taxes on all that money. The tax dodge doesn't change this. But, it does change when you pay those taxes. If you put $1 million of that $3 million into a movie, you get a $1 million tax deduction this year, so that you only pay taxes for the $2 million bracket. You make back your investment of $1 million another year, in which you only made $1 million, so you are again in a lower tax bracket.
So, you still pay taxes for the full $2 million extra you made, but you did it in a lower tax bracket over 2 years. The money you didn't spend in taxes counts as a profit. It's not free money, it comes out of the pockets of the governments that put the loopholes in their tax laws.
The first time I saw a preview for bloodrayne, I thought it was another of those shitty histolical fantasy action-shows the WB pumps out, only for some cable network. Later, I remember watching a preview for bloodrayne on TV, and I thought "hey, this looks a little better than it did before" and then the preview says" UNDERWORLD: EVOLUTION" and I'm like oh
I love quake!
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[xeno]Julios
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right - but what if the movie flops terribly and doesn't recover its profit?IW Coriolis wrote: You make back your investment of $1 million another year, in which you only made $1 million, so you are again in a lower tax bracket.
according to another article i read, ppl still profit off this!
http://www.cinemablend.com/feature.php?id=209Hollywood often complains about box office slumps. They blame piracy, they blame DVD sales, they blame anyone and anything but themselves. You see Hollywood’s a bit like North Korea, if they ever admitted that the regime they run was flawed and oppressive the people at the top of the tower would come crashing down. So, like any good regime, they choose to blame their failures on the peasants for either not submitting a big enough offering or stealing from the state. The savvier public, however, blame an endless onslaught of mediocre, hollow projects that are touted as remakes, sequels, prequels, re-imaginings, reinventions or video game adaptations. To me that’s just a whole lot of different ways for marketing people to say “lazy recycled crap” but I digress.
But ask yourself this; what if you discovered a miraculous way to make a profit from making these bad movies? An ingenious way to guarantee that if your movie flops, you’ll actually make money. Wouldn’t a box office slump be the perfect climate for you; slipping your bad movies into a world where blockbusters are failing weekly? If it flops, the studios will blame the ticket buyers for not buying or the “illegal” downloaders for stealing instead of you for intentionally sucking. Meanwhile, you sit back safe and secure in the knowledge that while your project drops out of the 300 theatres it was showing in after 2 weeks, it is actually making you a mint. Sound unlikely?
Not as unlikely as you’d think... especially if you’re name is Uwe Boll.
see this thread:
http://www.quake3world.com/forum/viewtopic.php?t=14188
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IW Coriolis
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I still don't understand it fully. That article alluded to the law that you can take out a loan, deduct that money, finance a movie and deduct it again, then you don't pay taxes until the movie makes a profit.
So, let's see how this works. I make $10 million. My tax rate would be 50% (for easy math). I take out a $1 million loan, and finance a movie for $1 million. This gives me $2 million in deductions, so I only pay $4 million in taxes instead of $5 million. I still have to pay that $1 million loan back, so I pay out $5 million either way and end up having $5 million for myself. However, I think they suggested that the loss of the movie is also deductable, so if the movie only makes back half its production costs then I can write off another $500K and I end up making $250K by the movie flopping.
If, instead, the movie does make money, I'm in even a better situation. I pay back the $1 million loan with the $1 million I make to recover the investment. But this first $1 million is tax free under german law; f the money takes in double its cost then I make $2 million but only pay taxes on the second $1 million. So I end up making $11 million over the year and pay taxes on only $9 million of that because of the $2 million in deductions. That untaxed $2 million nets me $1 million more in my pocket.
So, let's see how this works. I make $10 million. My tax rate would be 50% (for easy math). I take out a $1 million loan, and finance a movie for $1 million. This gives me $2 million in deductions, so I only pay $4 million in taxes instead of $5 million. I still have to pay that $1 million loan back, so I pay out $5 million either way and end up having $5 million for myself. However, I think they suggested that the loss of the movie is also deductable, so if the movie only makes back half its production costs then I can write off another $500K and I end up making $250K by the movie flopping.
If, instead, the movie does make money, I'm in even a better situation. I pay back the $1 million loan with the $1 million I make to recover the investment. But this first $1 million is tax free under german law; f the money takes in double its cost then I make $2 million but only pay taxes on the second $1 million. So I end up making $11 million over the year and pay taxes on only $9 million of that because of the $2 million in deductions. That untaxed $2 million nets me $1 million more in my pocket.
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[xeno]Julios
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Did Germany really create this law just to help out bad filmmakers?
So in US terms, this is basically like using an offshore tax haven to not pay taxes. Because surely you can't be refunded for making a $10m flop of a movie if your income is only $2m for that year, right?
In other words, he can't be making real profit, only massively offsetting his tax burden - to the point of not paying any probably.
Right?
And the bigger the flop, the bigger his tax break.
So in US terms, this is basically like using an offshore tax haven to not pay taxes. Because surely you can't be refunded for making a $10m flop of a movie if your income is only $2m for that year, right?
In other words, he can't be making real profit, only massively offsetting his tax burden - to the point of not paying any probably.
Right?
And the bigger the flop, the bigger his tax break.
