Dáil Éireann Debate, Wednesday - 23 September 2020
67. Deputy Niamh Smyth asked the Minister for Finance if guidance has been provided to the audio-visual sector on the correct application of section 481 tax relief in the context of increased costs associated with operating within Covid-19 health and safety guidelines. [25904/20]
View answer68. Deputy Niamh Smyth asked the Minister for Finance his views on the application of section 481 relief for productions which have been abandoned as a result of Covid-19. [25905/20]
View answerI propose to take Questions Nos. 67 and 68 together.
In accordance with the section 481 certification process, where a project has been suspended, it is a requirement for production companies to notify the suspension to the Department, of Media, Tourism, Arts, Culture and Sport (DMTACS).
It is my understanding that the DMTACS have received a number of such notifications as a result of the Covid-19 restrictions. Revenue, who have ongoing contact with my officials, DMTACS, Screen Ireland and industry representatives on matters relating to the section 481 film credit, have advised that they are not aware of any film projects that have subsequently been abandoned. A number of projects recommenced production over the last few weeks and many others are currently preparing to recommence.
Since the onset of the Covid-19 crisis, my officials have worked closely with DMTACS, Revenue and Screen Ireland in order to support the film industry to continue or recommence production and ultimately to complete film projects.
While the process of film production is now more complex, there has never been a greater requirement for audio-visual content, spurred by entertainment needs during a period of global restrictions. Therefore, the focus of support is towards the completion of projects to help the Irish film industry access that marketplace. Measures taken by DMTACS, the Arts Council and Screen Ireland have focused on:
- bringing forward the payment of grants awarded this year to ensure financial commitments can be met and waiving eligibility requirements which no longer apply due to the COVID-19 crisis; and
- initiatives to support artistic and creative life during the COVID-19 crisis.
Details of supports available for the arts sector may found at the following link:
https://www.chg.gov.ie/app/uploads/2020/05/covid-19-support-and-information-for-the-arts-sector.pdf
Additionally, the section 481 film credit is designed to support both short and long-form projects which means there is latitude for projects that take time or are suspended and completed at a later date. There is no penalty for necessary and reasonable delays such as those currently being experienced in the industry.
With regard to the Deputy's question on guidance for the treatment of Covid-related costs, as of Finance Act 2018, the film tax credit has operated on a self-assessment basis. In consideration of this, there is detailed guidance available on the Revenue website on the criteria to be applied when assessing the qualification of costs under section 481.
All qualifying expenditure that is wholly, exclusively and necessarily incurred to produce a qualifying film in the State can form part of the eligible expenditure used to calculate the credit. This includes the necessary additional health and safety costs required to continue a production due to Covid-19
Self-assessment requires producer companies to consider and apply the criteria to the circumstances of their own productions using the existing guidance. In preparation for recommencement of productions in Ireland, there has been ongoing dialogue between Revenue and representatives of the film industry on specific examples of additional expenditure required to manage a production due to Covid-19.
