To coincide with the publication of Ireland's Finance Bill for 2008, the Irish government has today published a consultants' report commissioned last year in advance of the renewal of Ireland's Section 481 tax incentive.
The bill took little account of recommendations made by the Irish Film Board and by producers' and employers' lobby groups,which wanted:
- An increase in the rate of investor tax relief (from 80% to 100%).
- Afourfold increase in the amount an individual investor can invest
- and a broadening of eligible spend criteria to compete with those operated in the UK.
Instead the finance minister increased the ceiling on expenditure in any one film from Eu35m to Eu50m.
This will neither increase the percentage net value of S481 to the producer, or address the issue of eligible spend.
However, it is in line with one of the recommendations in the consultants' report (see below) which was submitted in early November.
The Minister for Arts, Sport & Tourism, Seamus Brennan, has welcomed improvements to Section 481 which, a Department release states, he and the Minister for Finance have been working on for some time.
'The tax relief is extended [as was announced in December] until 31 December 2012, the overall ceiling on qualifying expenditure for any one film is increased from Eu35m to Eu50m, and an enhanced grant scheme of direct aid to film makers, as an optional alternative to Section 481, is also proposed.'
The latter provision is in the consultants' recommendations but does not fall within the ambit of the Finance Bill. Speaking to Screendaily a spokesman for the Minister for Arts, Sport & Tourism said the 'enhanced grant scheme of direct aid' was under discussion at present, and likely to be administered by the Irish Film Board.
He could not confirm whether this would be from the Board's existing budget or through a separate scheme.
The spokesman also confirmed that the future of Ardmore Studios, in which the state has a one-third stake, is under active consideration by the Minister. The options being either to sell, redevelop a studio on the same site, or use the value of the asset to build a new studio on a greenfield site.
Indecon Report - Summary recommendations to support the future development of the Irish Audiovisual Industry:
1. Section 481 film industry incentives should remain for the next 3-5 year period but should be subject to review in advance of the expiry deadline.
2. No change should be made to incentives for television production.
3. Consideration should be given to some marginal enhancements of the incentives for film production. Specifically, we propose an increase in the cap on the level of expenditure per project from Eu35 million to Eu50 million and an increase in the percentage of eligible expenditure allowable for tax relief purposes to 90%.
4. An enhanced grants scheme should be provided by the Irish Film Board as an optional alternative to Section 481 for film and TV production in Ireland but conditional upon such projects not also obtaining Section 481 support.
5. The Irish Film Board, jointly with the industry, should develop a 10-year strategic plan to address the sustainability of the industry and its vulnerability to changes in tax incentives in other countries and to enhance its net economic contribution.