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Study Finds Tariffs Could Help Ease VFX Subsidies

The results of a feasibility study aimed toward reducing the impact of foreign tax incentives on the visual effects industry find that international subsidies that injure domestic industries can be challenged in the International Trade Court.

The results of a feasibility study aimed toward reducing the impact of foreign tax incentives on the visual effects industry have been released. Commissioned with the help of over 200 donors, the study is the result of a funding campaign launched in December by the anonymous VFX Soldier blog.

Conducted by Washington D.C.-based Picard Kentz & Rowe (PKR), a law firm specializing in international trade law, the study finds that a legal challenge to foreign tax subsidies might be possible and recommends that the visual effects industry form an organization to build a case.

PKR’s report flags countervailing duties on films that have benefited from foreign subsidies as a potential recourse. These tariffs, intended to alleviate the damaging effects that foreign tax incentives can have on the domestic production of certain goods, have been imposed in the past on everything from steel to shrimp.

VFX Soldier writes, “While using the CVD [countervailing duty] law would have its challenges, it is important to note that the application of CVDs are mandatory, meaning if the conditions are met, the US government cannot just decline to apply it.”

PKR attorney David Yocis will be part of a SIGGRAPH panel, “The State of the Visual Effects Industry,” exploring the wide variety of business practices and issues surrounding the current state of visual effects production on Thursday, July 25, from 2:00PM to 3:00PM PST, at the Anaheim Convention Center in Ballroom AB. The panel will be moderated by Jim Hillin and attended by VFX veterans Dave Rand, Scott Squires and Scott Ross and Animation Guild labor organizer Steve Kaplan.

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