Screen tax credit cap ‘hurts Irish film and television industry’
International investment in the Irish film, television and animation industry is hampered by a cap on the tax credit that can be claimed by productions made in the Republic, according to a new report commissioned from PwC by Ardmore Studios and Troy Studios.
The ceiling of 70 million euros of eligible expenditure per project on which the screen tax credit of Article 481 can be claimed undermines the attractiveness of the State for large-scale international productions, it believes. he argued that the cap should either be increased or removed. completely.
Several competing markets for foreign direct investment (FDI) in the audiovisual industry – including the United Kingdom, Hungary, Australia and New Zealand – no longer impose a cap, while the entire sector is experiencing a boom in spending around the world which has driven the average cost of productions. outbreak.
A 2017 independent report, commissioned by the then government from consultants Olsberg SPI and Nordicity, recommended that the cap be raised to € 100 million, but this was not acted upon.
The tax credit was worth € 469m to the Irish economy in 2019 – a return on investment of € 3.80 for every euro it costs the Treasury – according to the PwC report, which was commissioned with support Animation Ireland and Screen Producers Ireland.
Some 124 productions were supported by Section 481 relief during the year, resulting in the employment of 16,952 full-time positions and provided approximately 40,000 days of training and development. skills.
Elaine Geraghty, chief executive of Ardmore Studios and Troy Studios, said the state was well positioned to benefit from a “dramatic shift” in global demand for content.
“What is becoming increasingly clear, however, is that the upper limit of € 70 million on our Section 481 tax incentive is an obstacle for Ireland to secure these large-scale international productions.” , she said.
“The government’s stated ambition is to increase the scale of the sector to the point of doubling employment to 24,000 people, for a gross added value of around 1.4 billion euros. To achieve this, the section 481 incentive must be adjusted to ensure that Ireland remains as competitive as possible globally. ”
In 2019, productions to benefit Section 481 included TV shows Normal People, Miss Scarlet and the Duke and The Young Offenders, as well as the animated series Rescue Bots, Micronauts, Vampirina and Doc McStuffins, and movies such as The Rhythm Section and Cartoon Saloon’s. Oscar nominated Wolfwalkers.
Last year, despite the pandemic disrupting much of production activity around the world, applicants included Netflix spin-off Vikings Valhalla, the recently released teenage series Fate: The Winx Saga – filmed at Ardmore Studios in Bray and nearby Kilruddery House – and the upcoming Apple TV Plus sci-fi series Foundation, filmed at Troy Studios in Limerick.
Irish animation companies, including Cartoon Saloon, meanwhile are awaiting clarification from the Revenue Department on whether work carried out remotely by its crew from sites outside the State due to restrictions in pandemic cases will be authorized as eligible expenditure under the program.
The call for more favorable tax credit terms comes as Irish industry tries to catch up with demand for large-scale studios. There are three “relatively large” establishments in the state – Ardmore, Troy and Bray’s Ashford Studios, where Valhalla is based – but when occupied, potential investments can be lost.
The development of three new studio projects in Greystones, Ashbourne and Grangecastle will be “an important step” in expanding the capacity of major studios for larger productions, especially those between 150 and 200 million euros, notes The report.
But he adds that the certainty of section 481 will be essential to the commercial viability of this infrastructure.
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