Irish Film Tax Breaks Praised By SPI

by Jason Gorringe, Tax-News.com, London

30 January 2004

In its recently released annual report, film industry group, Screen Producers Ireland praised the government's decision to extend existing film tax breaks, explaining that they are crucial to the continued success of the industry in the Republic.

The SPI review of 2003 revealed that currently in Ireland, there are 4,300 people employed directly in the film and television industry, with another 3,000 employed in tourism sector as a direct result of Irish film-making.

It additionally explained that the film industry contributes around EUR107 million annually towards GNP, and that it attracts an average of EUR136 million in foreign inward investment each year.

Suggesting that for the Irish film industry to continue to realise its potential, it will need sustained government support, the SPI report continued:

"The current film tax incentive scheme - Section 481 - has proved itself a very effective scheme in serving the interests of the national economy, the film industry and the general public. The incentive is a focused incentive that stimulates significant new activity."

It continued:

"Sustained tax incentive support is essential to maintain and develop this important national industry. The elimination of film tax incentives would signal the end of the Irish film industry as we know it today, with the loss of 80% of industry revenue and 80% of industry employment in the immediate short term."

"Long term government commitment to this industry and to the continuation of tax incentives will create the necessary environment to develop this industry and realise the potential benefit for Ireland Inc. of a truly vibrant national film industry. Given the success of the incentive to date, it would be important to maintain many of the key features of this scheme; however, some changes are required to sustain competitiveness and maintain an efficient transparent scheme."

The key changes recommended by the SPI were:

• To establish a government commitment to supporting the film industry with a 10 year extension to film tax incentives, subject to a five year review;
• To increase the cap on investment to EUR21 million;
• To establish a Certification Standards Board to oversee the certification process; and
• To incorporate recently published Revenue Guidelines in legislation.

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