Film tax break conditions eased

The condition that at least 75 per cent of the production work on a film must be carried out within the State to receive tax relief has been removed in the Finance Bill.

A production company will now only have to carry out a minimum of 10 per cent of the production work on a film in the Republic to qualify for the relief.

In practice, this means that many production companies will only have to locate their head offices here for investors in the film project to qualify for tax relief, which is available on 80 per cent of their investment.

The remainder of the production work may be carried out in other EU member states, any country with which the Republic has a double taxation agreement, and, under certain circumstances, in any other country, subject to approval and monitoring by the Revenue.

Tax relief on film investment, also known as Section 481, was extended in Budget 2004 until December 31st, 2008; however, the revised scheme was subject to approval from the European Commission under State aid rules.

Last year, the European Commission approved the State aid, but only if the conditions on where the production work was carried out were removed.

Since January 1st of this year, the overall cap on the amount of investment that can qualify for the relief increased from €10.48 million to €15 million.