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Hollywood studios 'not paid box office share' by China | Hollywood studios 'not paid box office share' by China |
(about 1 hour later) | |
China has not paid Hollywood its share of the profits from some of this year's big box office films, according to US media reports. | China has not paid Hollywood its share of the profits from some of this year's big box office films, according to US media reports. |
The Hollywood Reporter said the China Film Group has stopped paying a share of takings until a dispute over a new 2% tax on foreign films is resolved. | The Hollywood Reporter said the China Film Group has stopped paying a share of takings until a dispute over a new 2% tax on foreign films is resolved. |
A deal agreed last year between the US and China relaxed some restrictions on foreign film releases in China. | A deal agreed last year between the US and China relaxed some restrictions on foreign film releases in China. |
It put the share of profits enjoyed by foreign studios at 25%. | It put the share of profits enjoyed by foreign studios at 25%. |
According to the Motion Picture Association of America, China's box office revenues increased by 36% to $2.7bn (£1.8bn) in 2012, making it the world's second-biggest movie market and underscoring its importance as a key market for Hollywood's moviemakers. | According to the Motion Picture Association of America, China's box office revenues increased by 36% to $2.7bn (£1.8bn) in 2012, making it the world's second-biggest movie market and underscoring its importance as a key market for Hollywood's moviemakers. |
'In breach' | 'In breach' |
The boost came after a World Trade Organisation (WTO) deal reached by US Vice-President Joe Biden and China's then Vice-President Xi Jinping, in which China agreed to increase the number of films allowed to be screened in the country to 34. | |
In return, foreign studios would receive a 25% share of box-office takings, up from between 13% and 17%, as per a previous arrangement. | In return, foreign studios would receive a 25% share of box-office takings, up from between 13% and 17%, as per a previous arrangement. |
The Hollywood Reporter said the state-run China Film Group subsequently added a 2% value-added tax to each film release. | The Hollywood Reporter said the state-run China Film Group subsequently added a 2% value-added tax to each film release. |
"Chinese authorities agreed that additional payments, including any taxes, would not come out of the 25% split. But late last fall, the China Film Group informed studios that it intended to pass along the tax after all," said the magazine. | "Chinese authorities agreed that additional payments, including any taxes, would not come out of the 25% split. But late last fall, the China Film Group informed studios that it intended to pass along the tax after all," said the magazine. |
So far, Hollywood has refused to pay, saying it is in breach of the WTO deal. | So far, Hollywood has refused to pay, saying it is in breach of the WTO deal. |
The ongoing dispute means overseas studios have not received any share in profits from China for some of this year's biggest films. | The ongoing dispute means overseas studios have not received any share in profits from China for some of this year's biggest films. |
As part of Hollywood's attempt to woo Chinese audiences, Disney released a special version of Iron Man 3, with an extra scene featuring a new character and storyline. | As part of Hollywood's attempt to woo Chinese audiences, Disney released a special version of Iron Man 3, with an extra scene featuring a new character and storyline. |
The Marvel Comics-based movie in which Robert Downey Jr. continues his success as superhero Tony Stark, earned a record-breaking $65m in China its first weekend. | The Marvel Comics-based movie in which Robert Downey Jr. continues his success as superhero Tony Stark, earned a record-breaking $65m in China its first weekend. |
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