Under Division 376 of the Income Tax Assessment Act 1997 companies can claim tax offsets for qualifying Australian production expenditure on films completed during the year. The offset is available for feature films and television mini-series produced for cinemas, television or other forms of public release (including satellite, cable, tapes and DVDs) and amounts to 12.5% of the company's qualifying expenditure on each film project.
The eligibility requirements include a film having:
- certification by the Arts Minister that it was completed on or after 4 September 2001
- a minimum qualifying expenditure of $A15 million, and
- 70% of the total expenditure spent on production activity in Australia-where qualifying expenditure was between $A15m and $A50m.
Films with Australian production expenditure over $A50m will automatically qualify for the offset.
Where the tax offset is claimed, other incentives, such as funding from the Film Finance Corporation, or deduction under Division 10B or Division 10BA of the Income Tax Assessment Act 1936, become unavailable. The tax offset is not available if deductions are claimed under Division 10B by the company or someone else or if a provisional certificate or final certificate for the film has been issued under Division 10BA. A FLIC is not able to invest any of its concessional capital in a film production that will claim the tax offset.
For further information, a fact sheet about the tax offset is available on the website of the Department of Infrastructure, Transport, Regional Development, Communications and the Arts at www.infrastructure.gov.au.