Explain German film investment tax credit (pre2006)?

Factual Questions
1

Germany had, at least as recently as 2006, a tax credit on investing in movie production that I need explained better. I read an article that said that it had the effect of making an investment in a film that lost money actually better than one that turned a profit, but failed to explain how.

The part it did explain was that the entire investment could be tax deductible, but that tax was only charged on the movie’s “return”, which I take to mean profit. But still, a profit would be better than not, right?

Wikipedia added that part of the plan is to sell the copyright to an investor for the full production cost of the movie, then lease it back for 90%. I think the idea here is that the “lease fee” isn’t taxable income, so the investor gets a tax deduction for the full 30 million the film cost, but he only gave you 3 million (because you gave him 27 million back for the lease).
It also suggests you can do this multiple times, by selling the leased rights to someone else, then leasing them back for 90% again. So you could raise the full 30 million by selling the movie to 10 different people, each of whom gets to deduct 30 million from their taxable income but only pays 3 million.

But the article I was reading contended that the tax law actually made investing in a movie that doesn’t turn a profit more profitable than investing in one that does, and therefore someone might intentionally make bad movies so they would lose money so the investors would profit.
(And yes, this whole thing does remind me of Mel Brooks’ The Producers, but that’s a tale for another day.)

2

Well, Uwe Boll famously gamed that particular system – his godawful movies were basically a scam to allow a bunch of wealthy “producers” evade taxes in Germany.

Links to two articles on the subject follow.

First, a look at Uwe Boll himself:

Second, a look at the whole thing, with some asides about similar tricks applicable to other countries apart from Germany:

Copy-paste of an excerpt from the latter article:

[QUOTE=Salon Magazine]
“<…>it’s not only Paramount that employs these devices—every studio uses them to minimize risk. Remember all those stories about how New Line was betting its entire future on the Lord of the Rings trilogy? Not quite. New Line covered almost the entire cost by using German tax shelters, New Zealand subsidies, and pre-sales. If studio executives don’t crow in public about such coups, it’s probably out of fear that such publicity will induce governments to stiffen their rules<…>”
[/QUOTE]

3

Sorry, I sort of forgot to come back to this.

Having read the articles, it seems the answer is that it isn’t possible. They specifically mention the article I had read (alleging that Uve Boll was intentionally making bad movies) was wrong, at least in it’s assertion that movies that lost money could be more profitable then ones that made money.