Summary of Section 481 Irish Film Tax Credit
“Section 481” is a tax credit, incentivising film & TV production made in Ireland, administered by Ireland’s Revenue Commissioners.
What types of projects qualify?
The incentive applies to feature film, TV drama (singles or series), animation (excluding computer games), & creative documentary.
Who is eligible to apply?
The application to Revenue is made by a qualifying “Producer Company”.
To qualify a “Producer Company” must –
- Be Irish resident company or trading through a branch or agency in the State
- Be a film production company which makes film and /or TV for cinema exhibition or broadcast or online
- Be trading for at least 12 months and have filed with Revenue a corporation tax return 9 month after the end of the trading period, (be in existence for at least 21 months)
- Not be connected to a broadcaster
- Hold 100% shareholding in a “Qualifying Company” which will incur the eligible expenditure on the production.
What is a “Qualifying Company” :
- An Irish resident company, and
- That exists as a special purpose company set up to make one film and one film only, and
- That incurs all of the Irish eligible expenditure on the production
What is the “Section 481” benefit worth?
The applicant producer company can claim a payable tax credit of up to 32% of Irish eligible expenditure.
What is Irish eligible expenditure?
Irish eligible expenditure is defined as money spent on cast & crew working in Ireland, regardless of nationality, as well as money spent on goods, services & facilities purchased in Ireland.
Is withholding tax applied to international cast & crew working in Ireland?
Film Withholding Tax (FWT), at a rate of 20%, applies to payments made to non-EU Tax resident Actors (including voice-over artists) for artistic services rendered to the “Qualifying Company”.
Outside of the FWT which only applies to some actors, other cast and crew may be subject to employment taxes in Ireland depending on the category of service they are providing to the production.
Is there a cap on the incentive?
There is no annual cap or limit on the funding of the programme, meaning there is no limit to the value of the tax credit payable to the production. However, there is a maximum limit on eligible spend that will qualify for the credit.
The tax credit has a “per project” cap of up to 32% of the lower of:
- “Eligible expenditure”
- 80% of the total cost of production
- €70 million
When is the tax credit paid?
Option A – Single Instalment:
On completion of the film / television series, a copy of the completed production plus audited cost of production accounts are included in submission of compliance sent to the Irish Revenue Commissioners. Once approved payment of 100% of the tax credit may be paid by the Revenue Commissioners within 30 days.
It should be noted that a production must be approved by the Irish Revenue Commissioners as qualifying for the Film Tax Credit prior to completion of the production even if this single instalment payment is chosen.
Option B – Two instalment where first installment is paid during production :
First instalment being 90% of the approved Film Tax Credit can be approved by the Irish Revenue Commissioners for payment upon receipt by them of a submission showing either:
- Full legal and financial Closing, including proof that 68% of amount needed to fund the Irish eligible expenditure has been lodged to the Irish production bank account; or
- Irish Film Board certification (IFB funded projects only); or
- Broadcasting Authority of Ireland certification (BAI funded projects only)
Second & final instalment being 10% balance of the approved Film Tax Credit can be approved based on submission of compliance report to Revenue as discussed at Option A above.
How is payment made by Revenue?
Payment of the relief is made in the form of a repayable Corporation Tax credit paid to the Producer Company on condition that it is immediately paid down to the Qualifying Company and available to production.