Film industry welcomes tax breaks
The existing Section 481 tax breaks for television and film will be extended until 2020 and will be reformed, Minister for Finance Michael Noonan announced today.
Significant changes will be brought in during 2016, when producers will be able to avail of a tax credit system to fund productions.
The move has been welcomed by the Irish Film Board and the Audiovisual Federation of the Irish Business and Employers Confederation (IBEC).
The sector in Ireland is going through a boom time at present particularly with large-scale television productions from the UK, but it is under pressure from the British Government which is planning to bring in tax incentives which will see many of these productions repatriated from abroad.
Minister for Arts Jimmy Deenihan said the extension to 2020 from 2016 was "very good news" for the audiovisual sector.
"The extension of this scheme will give a great deal of certainty to the Irish audiovisual sector to the end of this decade. Moving to a tax credit model will be a significant change, but there is an extended lead in period to the new arrangements to enable the sector to adapt," he said.
In addition, Mr Deenihan announced that €60.7 million will be provided for the Arts Council this year, a drop of 3.8 per cent over the €63.1 million allocation last year.
Mr Noonan said changing to a tax credit system will eliminate the need for high income investors to provide the funding for the scheme. It will also eliminate the present system where Section 481 funding is raised by going to wealthy investors.
Mr Noonan said they were receiving a disproportionate amount of the tax relief, money that could otherwise be going into film productions.
At present, investors can provide up to €50,000 for a television or film production which is classed as a deductable expense rather than income, which is taxed at 41 per cent.
If the production goes to plan, the money is returned with a profit to the investor.
Mr Noonan said the amount of money involved being returned to investors is too much.
Irish Film Board chairman James Morris said the budget measures will strengthen the sector and will help the industry here to attract major film and television production activity.
“The extension and future enhancement of the Irish tax incentive for the film and television industry demonstrates the commitment of the Irish Government to the future of the Irish film and television sector and Ireland’s creative industries. and television production activity to Ireland," he said.
“Despite the economic difficulties Ireland has experienced over the past few years the Irish film, television and animation industry has experienced high levels of production activity, contributing over €150 million, in terms of Irish spend on jobs and services, to the Irish economy in 2011."
Audiovisual Federation director Torlach Denihan said the extension of Section 481 provides “greater certainty for international productions thinking of filming in Ireland that is necessary because of their lengthy investment cycles”.