U.K. trade body the BPI has entered the debate on tax breaks for labels. In a statement issued today (Sept. 25), the London-based industry organization called on its government to extend a tax credit

U.K. trade body the BPI has entered the debate on tax breaks for labels.

In a statement issued today (Sept. 25), the London-based industry organization called on its government to extend a tax credit system for record companies. Furthermore, the BPI is backing the creation of a new Creative Industries Strategy Group to co-ordinate government and industry research and policy-making.

"We believe the time is right for government, together with industry, to consider closely a tax credit regime for A&R, which is the music business' research and development," BPI executive chairman Peter Jamieson said in a statement.

"Such a system," he added, "would create incentives for greater investment in our industry, and would put the development of British intellectual property on the same footing as in other industries."

The BPI's comments come on the heels of comparable pan-European calls from Brussels-based trade body IMPALA. The independent music companies' organization last week urged European governments to adopt a tax credit scheme for record labels similar to the system already declared in France.

The French government's tax credit, unveiled in January, will allow labels to offset part of their recording costs through a tax deduction of up to 20% of their production and career development expenses. Aimed at supporting the production of "new talents," the credit is limited to €500,000 ($639,000) per company each year. French indie trade body UPFI -- a member of IMPALA -- estimates the global cost for this plan at about €10 million ($12.79 million).

In a statement issued Sept. 20, IMPALA chairman Patrick Zelnik said, "The French minister for culture managed to understand that there will not be any musical diversity and local production if independent producers do not get any help to cope with ongoing technological mutations."

He added, "The issue is the same on a European level. If we want quality productions and artists with diverse backgrounds to emerge in festivals throughout Europe, this example must be followed."

The French tax credit was originally announced by French minister of Culture Renaud Donnedieu de Vabres during the Midem music conference. It was passed into law in August. The French government still has to issue a decree stating in details how the scheme will be applied; the minister promised that it would be retroactively applicable for the whole year 2006.

Commenting on the tax break scheme in a Sept. 15 press conference, Christophe Lameignère, chairman and CEO of Sony BMG France and president of major producers trade body SNEP, said he agreed that the system was good for the industry. He stressed governmental support had to remain limited. "We are proud that the music industry is not State-subsidized," he said.

While the tax credit is not yet implemented in France, UPFI is already calling for further extension. Stephan Bourdoiseau, UPFI chairman and director of French indie Wagram, stated, "We believe that we need to go even further as the market conjuncture has deteriorated since this plan was drafted."

Earlier his month, UPFI told a media gathering that the credit tax should also be applicable to record labels' salary expenses, and not only project-related costs. According to UPFI, this additional measure would cost €15 million ($19 million).