Dáil Éireann Debate, Thursday - 16 June 2022
40. Deputy Richard Boyd Barrett asked the Minister for Finance the assessments that are being carried out to establish whether the objectives for quality employment and training and the culture test are being met for the section 481 tax relief; if European Union conditions in relation to State aid for arts and culture state support are being met; and if he will make a statement on the matter. [31319/22]
Amharc ar fhreagra193. Deputy Richard Boyd Barrett asked the Minister for Finance if his attention has been drawn to the recent correspondence from EU Commissioner Vestager to the Irish Government in relation to State aid to the Irish film industry; if it is failing to meet the culture test for such State aid and his views on whether it may also not be meeting the industry development test similarly required for such State aid to the film industry; and if he will make a statement on the matter. [22482/22]
Amharc ar fhreagraI propose to take Questions Nos. 40 and 193 together.
I am not aware of any correspondence from Commissioner Vestager as set out in the Deputy’s question. My officials have also engaged with those in the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media (DTCAGSM) and the Department of Enterprise, Trade and Employment (DETE), who also advise that no such correspondence has been identified. My officials have sought clarification from the Deputy’s office on the question but unfortunately no further information was provided in the time available. I would note that, should any correspondence be received from the European Commission on State aid to the Irish film industry, or indeed any subject matter, I would treat it with the utmost priority.
It is possible that the Deputy may be referring to correspondence in respect of the Audiovisual Media Services Directive (AVMSD). The AVMSD governs EU-wide coordination of national legislation on all audiovisual media, traditional TV broadcasts and on-demand services. In May the European Commission referred five Member States, including Ireland, to the Court of Justice of the European Union over the failure to transpose the revised AVMSD (Directive (EU) 2018/1808). The revised Directive provides EU-wide media content standards for all audiovisual media. It does not relate to tax matters. The referral included a request to impose financial sanctions in accordance with Article 260(3) TFEU. This is a matter for my colleague the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media (TCAGSM).
With regard to the film tax credit, section 481 TCA 1997 provides a 32% payable credit for eligible expenditure on film production in Ireland. 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.
In order for a production to qualify for the relief it must have been issued with a cultural certificate by the Minister for TCAGSM. In considering whether to issue a certificate in relation to a film, the Minister for TCAGSM will consider whether the film will either or both:
i. act as an effective stimulus to film making in the State through among other things, the provisions of quality employment and training and skills development opportunities (referred to as ‘the Industry Development test’), and
ii. be of importance to the promotion, development and enhancement of the national culture including, where applicable, the Irish language (referred to as ‘the Culture test’)
To ensure adherence with the Industry Development test, all applications for film relief must include a Skills Development Plan. For all projects with eligible expenditure in excess of €2 million, a copy of the Skills Development Plan should also be submitted to Screen Ireland for approval. The Skills Development Plan requires information concerning the number of skills development participants and the types of skills activities undertaken. Within 6 months of completion of the project, applicants are required to submit a Quality Assurance Compliance Report including all evidence of skills development activity for all skills development participants.
Applicants for the film tax credit must also complete an undertaking in respect of quality employment. This undertaking commits applicants to compliance with all relevant employment legislation and requires them to have in place written policies and procedures in relation to grievances, discipline and dignity at work (including harassment, bullying and equal opportunity). These conditions shall be met by both the producer company and the qualifying company. If an applicant company does not adhere to the conditions specified in the undertaking, any credit claimed may be subject to recoupment by Revenue.
The Culture test is the mechanism which ensures that aid is provided only to projects which promote European culture. As part of the application to DTCAGSM, applicants must demonstrate how the project will be of importance to the promotion, development and enhancement of the national culture by meeting at least three of the eight applicable criteria. These criteria are set out on Screen Ireland’s website[1]. Further information may be requested from the applicant by DTCAGSM if any clarification is required. The test is assessed by one member of staff in DTCAGSM, reviewed by another member of the Department, and is finally approved at the Principal Officer grade. Should a production fail to pass the Culture test, it will not be certified by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media and will therefore not qualify for relief.
[1] www.screenireland.ie/filming/section-481#:~:text='Section%20481'%20is%20a%20tax,the%20Revenue%20Commissioners%20(Revenue)
