Scrapping Section 481 Will Decimate Irish Film Industry Says SPI

by Jason Gorringe, Tax-News.com, London

02 July 2003

The decision by Finance Minister Charlie McCreevy to end the system of tax breaks for film financing in Ireland will decimate the country's film industry, observers have suggested. The Republic now claims to be one of the top six locations in the world, according to Screen Producers Ireland.

The film makers' lobby group revealed that the so-called section 481 tax breaks have contributed to year on year growth of 18% in the industry, and account for 107 million euros of Ireland's GDP. The industry also directly employs 4,300 people bringing a further 49 million euros into the labour market, according to the SPI.

The lobby group has urged the government to extend the tax breaks for a further ten years, by which time it estimates the industry will employ up to 11,000 people with turnover rising from 103 million euros to 550 million euros. The cumulative effects of allowing the tax break to lapse next year will result in 80% of the industry being lost, the body claimed.

"Every country in the world has a tax break, every country in Europe, almost every state in the US is introducing one if they don't already have it, Canada has it and the idea that we won't is just crazy," writer and producer Jim Sheridan lamented at a recent SPI press conference. "We've got a snowball going that's building momentum and if it's stopped, we'd have to start up all over again, and I don't think that will happen," he added.

As well as an extension of Section 481, SPI is also hoping that the investment cap to take part in the scheme will be raised from its present 10.5 million euros to 21 million euros.

During 2002, 95 film, television and animation projects took place in Ireland. There are presently around 260 Irish firms involved in the sector, in addition to 47 post-production firms, according to the Irish Independent.

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