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Tax Incentives

Dáil Éireann Debate, Wednesday - 3 March 2021

Wednesday, 3 March 2021

Questions (231)

Richard Boyd Barrett

Question:

231. Deputy Richard Boyd Barrett asked the Minister for Finance if he will address a matter regarding actions by a company (details supplied); and if he will make a statement on the matter. [12109/21]

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Written answers

As the Deputy will be aware, I am not in a position to comment on specific taxpayers. However it should be noted that the details supplied refer to a matter occurring prior to 2015 and the Deputy will be aware that the film relief has been completely restructured since that time. Prior to 2015 the scheme provided tax relief to individuals investing in the film industry. In Finance Act 2015 the relief was restructured to a corporation tax credit which now provides direct support to film producer companies. The details supplied therefore relate to a time when the tax relief was claimed by investors, rather than the film production companies.

I am aware that there have been reports of industrial relations concerns in the industry and the Deputy will be aware that I have taken steps in recent Finance Acts to address these issues. Finance Act 2018 amended the section 481 certification process to provide that the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, after considering an application and applying a set of tests, may issue a Cultural certificate to a producer company stating that a film is qualifying film for the purpose of the credit. One of these tests relates to employment on the qualifying film. The application includes an “Undertaking in respect of quality employment” concerning employment practices on the film being certified and any adverse decisions of the Workplace Relations Commission against the company or companies within the film group.

The Film Regulations provide for the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media to set conditions relating to employment when issuing a certificate for a qualifying film. Regulation 4 details that these conditions are to be met not just by a producer company but also by the qualifying company (a designated activity company wholly owned by the producer company which exists solely for the purpose of making the one qualifying film).

Where a producer company or qualifying company fails to satisfy or comply with a condition or obligation specified in a certificate, any credit claimed subsequent to that certificate may be an unauthorised amount and may be subject to recoupment by Revenue.

With regard to any clawback of the film credit, I would note that the Revenue Commissioners are independent in their administration of the tax system. However I am advised that Revenue carries out a comprehensive programme of compliance operations each year across a broad range of economic sectors, including the film industry. Many of the operations are carried out on a multi-agency basis, which can include officials from the Department of Employment Affairs and Social Protection (DEASP) and the Workplace Relations Commission. The primary role of these joint investigation units, JIUs, is to detect non-compliance with tax and duty obligations, which includes non-operation of the PAYE system on foot of bogus self-employment.

Additionally, I am informed by Revenue that it monitors developments in labour market trends in conjunction with the DEASP. As part of that ongoing work, Revenue are assisting DEASP in developing a new Code for Determining Employment or Self-employment which is expected to be finalised early in 2021.

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