Vol. 479 No. 2
10 Miss de Valera asked the Minister for Arts, Culture and the Gaeltacht the types of investigations, if any, his Department now undertakes before approval is given for section 35 relief in view of the fact that a promoter who was given such a certificate by him has never released any of the productions, and the investors have been informed by the Revenue Commissioners that their tax relief is to be withdrawn. [12663/97]
The purpose of my Department's examination of applications for section 35 certification is to establish that each application meets the requirements of section 35 of the Finance Act, 1987, as amended.
It is the responsibility of the production company to ensure compliance with the terms and conditions of any certificate that may be issued following conclusion of the Department's examination. Failure to comply with the terms and conditions of the certificate is a basis for the withdrawal of tax relief to investors.
The issue of a certificate does not represent a guarantee that a film will be produced or that tax relief will be granted. Under the section 35 legislation, in common with other investment incentive schemes, investments are made at the risk of the investor and the question of the grant of tax relief to investors or of its withdrawal is a matter for the Revenue Commissioners.
Is the Minister aware that a promoter who was given such a certificate under section 35 relief has not to date released any of the planned productions, that investors have invested over £4 million, and that many of these investors find now that they cannot obtain any tax relief? Is the Minister satisfied with the type of investigations that took place before section 35 relief is approved? Will he outline the types of investigations involved? Is he aware of the case to which I refer? Is he happy with the outcome of that case and, if not, what does he intend to do about it?
I am aware of the case to which the Deputy refers. I do not intend to interfere in decisions or estimations made by the Revenue Commissioners which are properly theirs. I understand the Revenue Commissioners are involved in talks with representatives of the investors to whom the Deputy referred. Therefore, it would be inappropriate for me to comment on the matter. There are three components involved. The dealings of the film section of the Department of Arts, Culture and the Gaeltacht are with the producer and when a producer publishes a prospectus it is an invitation to invest. A point frequently stressed by the Revenue Commissioners is that if there is not any risk involved it cannot be called an investment. A portion of the funding for the film to which the Deputy referred was transferred to the film made eventually, but the precise sum involved is the subject of discussions between the Revenue Commissioners and the representatives of the investors.
I readily accept the Minister cannot interfere with the Revenue Commissioners. Will he refer specifically to the type of investigations he oversees in his Department for section 35 relief? Is he satisfied with such procedures and, if not, what type of procedures would he propose to ensure a fair and equitable system?
I am satisfied the necessary steps in the certification process and the completion of the film were taken by my Department. Appropriate action was taken when suggestions were made about non-compliance with the conditions and terms of the certificate. This is a matter of unfinished business between the Revenue Commissioners and the investors and different groups of investors are involved. In the recent months there has been an increase in the number of projects submitted for certification. A further test of capacity would probably delay the application process. Every action that should have been taken by my Department was taken.
