28/06/2007 - The tax shelters system for audiovisual investments in Ireland in 2006. It shows that production companies may raise funds depending on a film budget and explains why most of the funds come from individual investors. Conditions of eligibility are described as well.

Tax incentives

The current tax incentive in Ireland entitled “Section 481 of the Taxes Consolidation Act” is the remit of the Minister for Arts, Sport and Tourism. Tax deduction measures for audiovisual investment as they exist in present law are as follows:

Production companies may raise the following funds:
-up to 80% of the total cost of production of a film with a budget of €5,080,000 or less;
-between 66% and 80% of the total cost of production of a film with a budget between €5,080,000 and €6,350,000;
-up to 66% of the total cost of production of a film with a budget greater than €6,350,000;

individuals may invest a minimum of €250 and up to a maximum of €31,750 annually and can claim tax relief on 80% of their investment;
companies may invest up to €10,160,000 in any 12-month period with a minimum of €3,810,000 per film and can claim tax relief on 80% of their investment.

For more information, please consult Minister for Arts, Sport and Tourism.

It is worth noting that rates of corporation tax in Ireland have been reduced in recent years and are relatively low. As a result, tax incentives have now become less attractive for companies. This explains why most of the funds come from individual investors.

Conditions of eligibility

The work must be a television or motion picture film of a commercial nature with a view to making a profit. It must be certified as a qualifying film by the Minister for Arts, Sport and Tourism and approved by the Revenue Commissioners. A film production company may not seek investment before the granting of this certification. Moreover, 70% of the spend has to be made on Irish territory for tax exemptions to be granted.