Tax relief changes will see more money going to film industry

The level of tax relief available to the Irish film industry will increase by about 15 per cent after 2015, according to new provisions in the Finance Act.

The percentage of qualifying expenditure eligible for section 481 relief will increase from 28 to 32 per cent from the end of 2015 to 2020.

The change will coincide with the transition of section 481 from an investor-led relief to a tax credit system, which will come straight from the exchequer by way of a tax credit.

The changes were heralded in the budget by Minister for Finance Michael Noonan and they followed an economic impact assessment carried out by the Department of Finance which was scathing of the present investor-led arrangements.

Decision welcomed

It found that too much money was going to investors and not enough to production companies and it would be cheaper by a third for the State to fund films directly.

The decision was welcomed by Minister for Arts, Culture and the Gaeltacht Jimmy Deenihan who visited the set of Frank, a comedy which is directed by Lenny Abrahamson, last week. The film is partially funded by section 481 reliefs.

Irish Film Board chief executive James Hickey said that the critical factor will be whether or not the tax relief will be available upfront for film productions.

The new relief regime will not come into place until the Minister for Finance gives the go-ahead after a period of consultation with the film and television industry.

The new reliefs will come into place at the end of 2015 and will last until 2020.

Uncertainty

Mr Hickey said the issue of pre or post payment of the tax relief should be resolved as soon as possible.

“It would be really helpful for us if the Government brought forward this legislation at a reasonably early opportunity so it brings a degree of certainty of what will come down the tracks after the end of 2015,” he said.