Section 481 of the Taxes Consolidation Act 1997 provides a 32% payable credit for eligible expenditure on film production in Ireland. It is available to Irish and international film production companies that are resident in the State or in an EEA State and carry on business in the State through a branch or subsidiary. Section 481 is State Aid and requires the agreement of the European Union.
The Finance Act 2018 provided for a short-term, tapered regional uplift, commencing at 5%, for productions being made in areas designated under the State aid regional guidelines.
The regional uplift is phased on a tiered basis with an additional 5% available in years 1 and 2 which are 2019 and 2020. This reduces to 3% in year 3 which is 2021 and reduces again to 2% in year 4, which is - 2022. It will be 0% from year 5 on. The purpose of the regional uplift is to support the development of new, local pools of talent in areas outside the current main production hubs and to support the geographic spread of the audio-visual sector.
In considering whether the regional film development uplift applies, the following factors are relevant -
- whether the production of the film is substantially undertaken in an assisted region;
- whether there is limited availability of individuals with suitable experience or training who habitually reside within a 45 kilometre radius of the place of production to provide services, and
- in respect of the areas of expertise where there is limited availability, the company provides training for individuals that habitually reside within that 45 kilometre radius.
The regions availing of the uplift are limited to areas in Ireland sanctioned to receive regional aid under the EU regional aid guidelines. The EU Regional Aid Guidelines allow each Member State to provide enhanced rates of State aid in the least economically developed areas of each country. This enables the State to grant State aid, at enhanced rates, to businesses in order to support new investment and new employment in productive projects in Ireland's most disadvantaged regions. The least economically developed area of Ireland does not include County Cork and for this reason, the Regional Film Development Uplift cannot be extended to Cork.