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NZ Announces Changes To Film Tax Incentives

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

20 December 2013


The New Zealand Government intends to encourage a stronger domestically-sourced screen industry that will become less dependent on taxpayer incentives.

According to Economic Development Minister Steven Joyce: "There has been a sharp downturn in international production activity in New Zealand for both film and TV. This is due to a combination of factors, including [the] increasingly generous grant rebates and tax relief offered by other countries."

In response, the Government has announced that the Large Budget Screen Production Grant (LBSPG) and Screen Production Incentive Fund (SPIF) will be combined to form a single scheme, the New Zealand Screen Production Grant (NZSPG). The existing rebates of 15 percent for the LBSPG and up to 40 percent for the SPIF will be replaced.

For international productions, 20 percent will become the new baseline rebate accessible on the basis of qualifying New Zealand production expenditure. A further 5 percent will be made available where productions can demonstrate significant economic benefits and activities to strengthen the local industry. This incentive will supersede the additional grant made to screen productions that have Qualifying New Zealand production expenditure (QNZPE) of NZD200m (USD165m) or more. The grant is currently calculated on any guaranteed deferments or participation payments that are payable to New Zealand tax residents and are paid within three years from the first commercial release of the production.

Medium-sized productions (costing between NZD15m and NZD50m), which feature New Zealand content and demonstrate significant local creative control, will qualify for more support than previously. The Government will uncap its support for domestic film and television productions. The overall budget cap of NZD63.5m over five years will be axed, and caps on individual productions will rise to NZD20m.

TAGS: tax | business | tax incentives | revenue guidance | budget | ministry of finance | tax authority | tax rates | New Zealand

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