German court rules film levy unconstitutional

Tax on cinema owners not applied to broadcasters

COLOGNE, Germany -- Germany's federal administrative court has ruled that an existing law requiring cinema exhibitors to pay a levy to subsidize German theatrical productions is unconstitutional.

But the decision is far short of a complete victory for theater owners, who sued Germany's federal film board over the levy, which amounts to about $22 million annually.

While the court did not provide a detailed explanation of its ruling, its initial statement on the case did not mention many of exhibitors' key complaints, including the amount theater owners are required to pay or the legality of forcing exhibitors to subsidize German productions.

Instead, the court called the law unconstitutional because the levy is compulsory for theater owners but voluntary for German television broadcasters, who also benefit from a subsidized local film industry. This violates the "equal treatment" clause in Germany's constitution.

If the law were changed to make contributions from TV channels compulsory, it would supposedly pass muster with the court.

Getting broadcasters to agree to that, however, will be a tall order and could put Germany's film board on a collision course with the country's most powerful media interests.

For now, the legality of the film levy remains in limbo. The case has been passed to Germany's supreme court, which will make a final ruling, a process that's likely to take several months.
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