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COME FILM IN IRELAND

Why don't you make Scratch Films your Co-Production partner to film in Ireland? New tax incentives have made Ireland an even better location that also makes great financial sense!

 

Below we have outlined some of the details about the tax efficiency of Ireland as a production base for film-making. Please contact us if you have any further questions.

 

6th Jan 2015

                                       Enhanced tax breaks will boost                                          Irish film sector and attract                                                  major productions to Ireland –                                          Minister Humphreys

 

               Irish Minister for Arts, Culture and the Gealteacht

               Heather Humphreys TD

 

The Minister for Arts, Heritage and the Gaeltacht, Heather Humphreys TD, has said that enhanced tax breaks for the film and TV sector, which came into effect on January 1st will help to attract major international film productions to Ireland and boost the indigenous film sector.

Changes to Section 481, originally announced in the 2014 Budget, extend the scheme until the end of 2020 and will increase the value of Section 481 to 32% of qualifying expenditure, from its current value of 28%.

Minister Humphreys said: 

"Our film and TV production sector is going from strength to strength, despite the economic challenges we have faced in recent years. I want to make Ireland a first choice destination for international film makers, and improving the tax breaks available under Section 481 will be essential to achieve this.

"The Irish film and TV production sector supports up to 6,000 jobs; I want to see that number grow in the years ahead. The changes to Section 481 will give a greater deal of certainty to the Irish audiovisual sector and will allow it to maintain the existing jobs in the sector and create new ones.

 

"Under the changes which come into effect from today, the definition of ‘eligible individual' is being extended to include non-EU talent, so major Hollywood actors and actresses will be included. This will boost the attractiveness of Ireland as a destination for film investment, and brings us into line with the UK and other countries in Europe.  

"Ireland has developed a strong reputation as being a superb film location in recent years. It was a fantastic achievement to bring Star Wars to Skellig Michael during the summer. And we have become home to some of the biggest TV shows, including the Tudors, Vikings and Penny Dreadful. When these shows come to Ireland, they hire local talent and crews and make a huge contribution to the local economy.  

 

"My Department has worked closely with the Irish Film Board, the Revenue Commissioners, the Department of Finance and the industry itself to bring about these changes, which I believe will have a very positive impact on the Irish film and TV sector. I have also secured a commitment from the Minister for Finance to keep these changes under close review, with a view to introducing additional improvements which would help further boost the indigenous film sector and attract big budget productions to Ireland."

 

Financing your Film / Tax Incentives /

Section 481

Ireland's Film & TV Tax Credit

 

What is "Section 481"?

"Section 481" is a tax credit, incentivising film & TV production made in Ireland, administered by Ireland's Revenue Commissioners (Revenue). 

 

Since January 1st 2015, Ireland's tax incentive "Section 481" for film and television has been enhanced, creating a new payable tax credit programme.

  • Increased rate of relief

The rate of tax relief has been significantly increased and is now worth up to 32% of eligible Irish expenditure.

  • Expansion of eligible expenditure criteria

The payable tax credit is now based on the cost of ALL cast & crew working in Ireland, regardless of nationality.

  • Greater flexibility in the application process

An application for a certificate entitling the applicant to the tax credit can be submitted at any time prior to the completion of the project.

 

What types of projects qualify?

The incentive applies to feature film, TV drama (singles or series), animation (excluding computer games), & creative documentary. Projects must either pass the Cultural Test or qualify as an official co-production under one of Irelands Bilateral Co-Production Treaties or the European Convention on Cinematographic Co-Production.

 

What is the "Section 481" benefit worth?

The applicant producer company can claim a payable tax credit of up to 32% of "eligible expenditure".

 

What is eligible expenditure?

The payable tax credit is based on the cost of ALL cast & crew working in Ireland, regardless of nationality, as well as goods, services & facilities purchased in Ireland.

 

Is withholding tax applied to international cast & crew working in Ireland?

Film Withholding Tax (FWT), at a rate of 20%, applies to payments made to Actors (including voice-over artists) for artistic services rendered to the "Qualifying Company", but only if the Actor in question is tax-resident outside the EU and EEA. 

 

Is there a cap on the incentive?

There is no annual cap or limit on the funding of the programme, meaning there is no limit to the value of the cumulative payable tax credits made by Revenue.

The tax credit has a "per project" cap of up to 32% of the lower of:

(1)     "Eligible expenditure"

(2)     80% of the total cost of production

(3)     €50 million

 

When is the rebate paid?

Option A - Single Instalment:

On completion of the project and submission of a compliance report to Revenue, payment of 100% of the tax credit may be paid by the Revenue within 30 days.

Option B - Two Instalments:

First instalment being 90% of the tax credit due, upon:

1) Financial Closing, including proof that 68% of eligible expenditure is lodged to the project production account;

2) Irish Film Board certification (IFB funded projects only); or

3) Tax credit guaranteed by financial institution, and

Second & final instalment being 10% balance on submission of compliance report to Revenue.

 

How is payment made by Revenue?

Payment of the relief may be claimed against the producer company's corporation tax (CT) liabilities. In the event the relief due is greater than any tax due by the producer company, then a payment of the excess will be made by Revenue.

 

Is there a minimum spend level?

Projects are excluded from the incentive if their "eligible expenditure" is less than €125,000, or the total cost of production is less than €250,000. 

 

When are applications made to Ireland's Revenue?

An application for a certificate entitling the applicant to the tax credit can be submitted at any time up to but prior to the completion of the project.

 

Does the tax credit apply to post production expenditure, including VFX?

Yes, the tax credit applies to "eligible expenditure", including that incurred during post production and/or on VFX.

 

Is there a "sunset" date?

Ireland's film and TV tax credit of up to 32% runs until December 31st 2020.

 

Further Guidance

Please contact us if you have any further questions.  It is recommended that international producers who are considering making a film or TV project in Ireland work with an established Irish production company. Your Irish producer has strong existing relations with local crew and other service providers, and can provide the full range of production services, including the application to Revenue for the tax credit, as well as managing all stages of production including budgeting, scouting, scheduling, casting and crewing.

 

OTHER TAX INCENTIVES

 

Corporation Tax
Ireland enjoys an EU approved Corporation Tax rate of 12.5% which is the lowest in Europe. This applies to all corporate trading profits. This rate has been a focus of Ireland strategy to attract inward investment creating a favourable economic and fiscal environment which supports industry.

This has been the cornerstone of Government policy in attracting inward investment into Ireland across the industrial sectors. Companies in Ireland trading in this space which have cross over activities to the screen industries are: e-Bay / Google / Yahoo / Universal Vivendi / Alliance Atlantis / Beyond Films. This low tax rate may be of particular attention to US/ European sales agents.

 

Tax Exemptions For Individuals
Individuals may locate in Ireland and enjoy tax-free income from their works under the ‘artist's exemption' scheme. It can apply to writers, including scriptwriters, visual artists and composers. Where individuals become resident in Ireland they are entitled, on making a claim, to have their earnings arising from the publication, production or sale of books, screenplays, plays and musical compositions, disregarded for tax purposes where the work or works involved are original and creative and have cultural or artistic merit.

 

Research & Development Tax Credit
In 2004, the Irish Government introduced a research and development tax credit. It is aimed primarily at research undertaken to acquire new scientific and technical knowledge. It is also aimed at achieving technological advancement directed at new or improving existing materials, products, devices, and systems. In order to qualify it is necessary to achieve scientific or technical advancement and involve the resolution of scientific or technological uncertainty. As the film industry converges with technology, this may be used by companies advancing research and development in technology.

 

Zero Rated - Value Added Tax
VAT (Sales Tax) is applicable on the supply of goods and services within the EU. Film production may avail of zero rating under Section 13A of the VAT Act when the master negative is being exported.