Australian Film Commission
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20 November 2017
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2001

Film production - refundable tax offset

4 September 2001

A new taxation incentive will be made available to producers of larger budget foreign and Australian films (including telemovies and mini series productions).

The incentive will begin from today for films which are yet to be completed and will be delivered in the form of a refundable tax offset paid through the tax system directly to producers.

The key requirement - for access to the incentive will be a minimum Australian expenditure of A$15 million on the film.

As well as this minimum requirement there will be two categories of eligibility:

- if the film's Australian production expenditure is between A$15 million and A$50 million, the producers will be required to spend a minimum of 70 per cent of the film's total production expenditure on film production activity in Australia to qualify for the offset;
- film productions that spend A$50 million or more in Australia will automatically qualify regardless of the percentage ratio of Australian expenditure to the film's overall budget.

These eligibility requirements are designed to encourage offshore producers to spend more in Australia on local casts, crew, post-production facilities and other services.

The refundable tax offset will be applied at a fixed rate of 12.5 per cent to qualifying Australian expenditure on the film, and will be provided on completion of the film to the film's producer through a tax return. The concepts of 'qualifying expenditure' and 'total budget' will be developed in consultation with industry.

Only eligible formats - feature films, telemovies and mini series - can qualify for the refundable tax offset.

Where the refundable tax offset is chosen, no other incentive, whether the deduction under Divisions l0B or l0BA Income Tax Assessment Act 1936 or by way of Film Finance Corporation funding will be available.

A board of industry representatives and government officials will examine applications from film producers to determine eligibility for the refundable tax offset. If this is granted, there will be provisional certification of the film. Final certification will be subject to completion of the film and a financial audit to ensure that the final expenditure satisfied the requirements of the incentive.

Films that have been completed before 4 September 2001 will not be eligible for the new refundable tax offset.

Any film that has not qualified for other support and has not been completed may apply for the new incentive instead of other support, regardless of whether it has received certification as an 'Australian film' under Division 10B (a pre condition for the tax deduction available under that Division).

Legislation will be introduced as soon as practicable subject to the constraints of the Parliament's legislation programme. The first priority for the Government will be consulting with film and television industry stakeholders to agree on definitions for what constitutes qualifying Australian expenditure and total production costs.

The refundable tax offset measure will be reviewed after five years.

Media Enquiries:
Tracey Mair
TM Publicity
For the Australian Film Commission
Ph: 0419 221 493
Email: traceym@tmpublicity.com

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