Section 481 provides relief in the form of a corporation tax credit related to the cost of production of certain films. The credit is granted at a rate of 32% of the lowest of:
- eligible expenditure
- 80% of the total cost of production of the film
The minimum amount that must be spent on the production is €250,000 and the minimum eligible expenditure amount to qualify is €125,000.
The Scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture. There is no requirement for production companies to hire Irish actors in order to qualify for the section 481 tax credit. However, as noted above, the credit is available only in respect of eligible expenditure which, in broad terms, encompasses payments for goods, services, and facilities in Ireland, including the employment of individuals by the producer company on the production of the film. Such employments include the film crew, in addition to actors.
A number of significant changes were made to the credit as part of 2018 Finance Bill process. In recognition of the nature of the production cycle and the long lead in times needed for productions to be undertaken, the credit was extended from its original end date of 31 December 2020 to 31 December 2024. Additionally, it was legislated to require production companies to apply for payment of the tax credit under the self-assessment system. Finance Bill 2018 also provided for a new short-term, tapered regional uplift, commencing at 5%, for productions being made in areas designated under the State aid regional guidelines. The regional uplift was introduced subject to State aid approval and the notification process is currently under way.
The application process has also been divided between the Revenue Commissioners and the Department of Culture, Heritage and the Gaeltacht. This provides an opportunity for earlier engagement on the training requirements associated with the credit, including the quality of training to be provided.