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... sting in the film industry could result in tax deductions, and there was no requirement for the film project to be produced locally or to hire local creative personnel. The tax deduction amount could also be deferred.

This tax loophole was quickly exploited by German investors and Hollywood alike. Hollywood studios could sell the copyright of a movie to a German company and then "rent" the film back for about ten percent less than the selling price, allowing both parties to profit from t ...

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