Australia Has More Favourable Film Tax Regime Than Canada, Says Report

by Mary Swire, Tax-News.com, Hong Kong

07 August 2003

A report put together by Australian film industry accountants Moneypenny Business and Taxation Services claims that the tax regime for shooting movies in Australia is more favourable than in Canada, a favourite location for Hollywood 'runaway' productions.

The accountancy firm's report states that on a budget of US$24 million, a runaway Hollywood production shot in Australia would save 7.5%, compared to the same venture in Canada. It also notes that the cost advantages increase as the movie budget rises, provided that the production qualifies for the 12.5% 'refundable tax offset' placed on film budgets over US$9.7 million.

Whilst the report acknowledges that rebates given by the Canadian government are often seen as higher than elsewhere, it explains that Canada's rebate system is based solely on labour costs, whereas the Australian system includes other expenses such as goods, services and many other items of expenditure within the country.

"The Australian refundable tax offset could be marketed as a rebate that will deliver a higher net result to US runaway productions both in dollar value and in the percentage it can represent of the budget," a ScreenDaily news report quoted the firm as observing.

The conclusions in the report were reached after currency fluctuations, relative labour costs, fringe benefits and the working environment had been taken into account, according to ScreenDaily.

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