Screen Australia Releases New Co-Production Guidelines

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

07 October 2010

After a review which began in late 2009, and following three months of consultation with Australian and individual practitioners, Screen Australia has released its revised and more flexible International Co-production Programme (ICPP) guidelines.

Official co-productions are made under formal arrangements between Australia and the governments of various countries. It is said that these arrangements are designed to foster cultural and creative exchange, allow the risk and cost of filmmaking to be shared and drive up quality and output.

Australia has treaties with the United Kingdom, Canada, Italy, Ireland, Israel, Germany, Singapore and China, and Memoranda of Understanding (MOUs) with France and New Zealand.

Under the ICPP, partners working together on official co-productions can take advantage of each other’s support systems. For example, official co-productions in Australia do not have to pass the Significant Australian Content test for eligibility for the Producer Offset tax rebate.

One of the key changes made under the new ICPP guidelines is that the points test used to assess the Australian creative contribution has been revised. The total number of points has been increased, which recognises the creative contribution of Heads of Department which were not previously allocated points (such as VFX Supervisor, Costumer Designer and Sound Designer).

In addition, Screen Australia has introduced a non-binding letter of preliminary compliance. This will allow Australian co-producers to seek guidance about whether a project may meet the requirements of the relevant co-production treaty (or MOU) and the guidelines. They can then use the letter to help attract finance, where potential financiers are cautious about committing funds without formal advice about a project’s co-production status.

However, as Fiona Cameron, Screen Australia’s Head of Strategy and Operations, pointed out, one of the greatest additional benefits of working in Australia within the ICPP includes access to the legislated certainty of the Producer Offset tax rebate. “Of course,” she said, “it’s no small thing that co-productions automatically bypass the Significant Australian Content test, ruling them eligible for the Producer Offset.”

Screen Australia administers the Producer Offset, which is a refundable tax rebate for producers of Australian feature films, television and other projects. It is worth 40% of qualifying Australian production expenditure (QAPE) incurred on a feature film; and 20% of QAPE incurred on programmes other than feature films (TV series, mini-series or telemovies, short-form animations, non-feature documentary, or direct-to-DVD or web-distributed programming).

It was introduced by the Australian Government in 2007, and is paid through the Australian company tax system after a project is completed and Screen Australia has issued the production company with a final certificate.

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