Ireland Woos Bollywood With Promise Of Tax Breaks

by Jason Gorringe, Tax-News.com, London

19 January 2006

The Irish government is currently wooing the multi-billion dollar Bollywood film industry with the promise of tax concessions, in an attempt to arrest a decline in foreign spending on film productions in Ireland.

On the first day of a six-day trip to India aimed at increasing Indo-Irish economic ties, Prime Minister Bertie Ahern told a press conference that the government was exploring “improved tax relief” measures to attract Bollywood producers to Ireland, and would announce new proposals in the near future. It is reported that tax concessions could be worth up to EUR15 million.

“Bollywood is something on our agenda. We have a lot of interest," Mr Ahern stated.

Irish Arts Minister John O'Donoghue, who Mr Ahern has dubbed his "minister for Bollywood" is due to meet filmmakers in Mumbai, the centre of the Indian film industry, on Friday to sell the advantages of Ireland as a film location.

Bollywood producers have used Ireland for scenes in 11 films since 2002. However, this is just a small fraction of the country's overall film industry, which produces about 800 films a year - more than any other country including the United States. Moreover, the Indian industry is reportedly growing by about 25% per year and was said to be worth an estimated $5.5 billion in 2004.

The Irish government's pitch to Bollywood comes at a time when uncertainty over tax incentives for the Irish film and television sector are continuing to cast a shadow over the future of the industry.

A report by the Audiovisual Federation published last month showed that while Irish TV production was up in 2004, it was a challenging year for production in the Ireland's film sector, which has seen overall expenditure decrease to EUR106.7 million in 2004 from EUR151.4 million in 2003.

"While there were some notable feature film productions... number and value of incoming international productions has decreased since 2003," observed Kevin Moriarty, Managing Director of Ardmore Studios.

Mr Moriarty attributed the decline in foreign film productions to the fall in the value of the dollar and increased competition from other territories.

The industry is calling on the government to improve the tax breaks known as Section 481 incentives, which some feel have discouraged big-budget productions from choosing to shoot in Ireland.

Despite the waning interest in Ireland as a film location, the sector nonetheless contributed some EUR12.2 billion to the Irish exchequer in 2004.

Ongoing discussions are taking place between the film industry and the Government in relation to improving Section 481 film incentives.

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