Section 481
Section 481 -
The
Irish
TAX
cREDIT
What is the ‘Section 481′ benefit worth?
The rate of tax credit is worth up to 32% of eligible Irish expenditure with up to an additional 5% regional uplift available (subject to EU approval) to projects substantially produced in the Uplift region. The regional uplift will be phased out on a tiered basis with 5% available in respect of claims made on or before 31 December 2020, 3% in respect of claims made on or before 31 December 2021, 2% in respect of claims made on or before 31 December 2022, and reducing to 0% from year 2023 on. In considering whether the regional film development uplift applies to a production, the Minister for Culture, Heritage and the Gaeltacht shall regard the following factors:
1. whether the production of the film is substantially undertaken in an assisted region
2. whether there is limited availability of individuals with suitable experience or training who habitually reside within a 45 kilometre radius of the assisted area to provide services, i.e. whether there is a lack of available trained talent to undertake a production in the respective area
3. in respect of the areas of expertise where there is limited availability, the company provides training for individuals that habitually reside within that 45 kilometre radius
Eligible expenditure criteria
The payable tax credit is based on the cost of all cast and crew working in Ireland, and all goods and services sourced in Ireland. This includes post production and/or VFX.
What types of projects qualify?
The incentive applies to feature film, television drama (singles or series), animation (excluding computer games) and creative documentary. Projects must pass the Section 481 Cultural Test.
What is the Section 481 Cultural Test?
All projects that are put forward to qualify for section 481, the Irish tax incentive for film and television are analysed by the department of Culture, Heritage and the Gaeltacht and must meet three of the following cultural test criteria:
The project is an effective stimulus to film making in Ireland, and is of importance to the promotion, development and enhancement of creativity and the national culture – through the medium of film, including, where applicable, the dialogue/narration is wholly or partly in the Irish language or the production of a full Irish-language version of the film is included as part of the total budget for the film
The screenplay (or, in the case of a documentary film, the textual basis) from which the film is derived is mainly set in Ireland or elsewhere in the EEA
At least one of the principal characters (or documentary subjects) is connected with Irish or European culture
The storyline or underlying material of the film is a part of, or derived from, Irish or European culture and/or heritage; or, in the case of an animation film, the storyline clearly connects with the sensibilities of children in Ireland or elsewhere in the EEA
The screenplay (or textual basis) from which the film is derived is an adaptation of an original literary work
The storyline or underlying material of the film concerns art and/or an artist/artists
The storyline or underlying material of the film concerns historical figures or events
The storyline or underlying material of the film addresses actual, cultural, social or political issues relevant to the people of Ireland or elsewhere in the EEA; or, in the case of an animation film, addresses educational or social issues relevant to children in Ireland or elsewhere in the EEA
Who is eligible to apply?
All application for the relief are made by a qualifying producer company.
A ‘Producer Company’ must:
Be Irish resident or trading through a branch or agency
Make film and television for cinema exhibition or broadcast or online
Not be ‘undertaking in difficulty’ (this requirement originates from EU State Aid rules)
Not be connected to a broadcaster
Hold 100% shareholding in a ‘Qualifying Company’
A ‘Qualifying Company’ must:
Be Irish resident or trading through a branch or agency
Exist as a Special Purpose Vehicle (SPV) to make one film
How are applications made?
The producer company must apply to the Minister for Culture, Heritage and the Gaeltacht for a certificate stating that the project is to be treated as a ‘qualifying film’ for the purposes of Section 481 relief. This application must be made at least 21 working days prior to the commencement of production in Ireland. Where the Minister issues a certificate in relation to a qualifying fiilm and all other provisions of Section 481 are complied with, a producer company may make a claim for the film tax corporation credit to the Revenue. Ireland’s tax credit is administered by the Department of Culture, Heritage and the Gaeltacht and payment is made by Revenue.
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 tax credits payable by Revenue. The tax credit has a ‘per project’ cap of up to 32% – 37%* of the lower of:
All eligible expenditure
80% of the total cost of production
€70 million
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 is the rebate paid?
Option A – Single Installment: On delivery of the project and submission of a compliance report to Revenue, payment of 100% of the tax credit may be paid by Revenue within 30 days.
Option B – Two Installments: First installment being 90% of the tax credit due, upon:
Financial Closing, including proof that 68% of eligible expenditure is lodged to the project’s production account
Screen Ireland confirmation (Screen Ireland funded projects only) or
Broadcasting Authority of Ireland (BAI) approval (BAI funded projects only) or
Where Revenue are provided with a guarantee, bond or similar banking instrument which secures the 90% payment of the tax credit
And Second and final installment being 10% balance on delivery of the project and 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.
Skills Development Requirements
In order to qualify for Section 481, the producer is required to develop the skills of those working on the production. A detailed Skills Development Plan should be submitted to Screen Ireland for approval 20 days prior to making an application for certification to the Minister for Culture, Heritage and the Gaeltacht. For further information, contact section481@screenireland.ie.
The Galway Film Centre and Gréasán na Meán Skillnet undertook a Training Needs Survey for the film and television industry in the West of Ireland in 2017. The results of this survey (link below) may be helpful in assessing the skills development requirements of the region.
Further Guidance
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.