The PDV tax offset applies to post, digital and visual effects (PDV) production for a film that commences on or after 1 July 2007. It is designed to attract post-production, digital and visual effects production to Australia, no matter where the film is shot.
The PDV tax offset is available to a company in respect of a film when the following conditions are met:
- The Minister for Environment Protection, Heritage and the Arts (the Arts Minister) has issued to the company a final certificate for the film in relation to the PDV tax offset.
- The company claims the PDV tax offset in its income tax return for the income year in which the company ceased incurring qualifying Australian production expenditure (QAPE) related to PDV production for the film.
- The company is either an Australian resident or a foreign resident with a permanent establishment in Australia and an ABN.
The PDV tax offset is 15% of the company's total QAPE that relates to PDV production for the film which is, broadly, expenditure on PDV production work undertaken in Australia. It is available to productions which do not necessarily shoot in Australia.
The issue by the Arts Minister of a final certificate to a company for a film in relation to the PDV tax offset is the central requirement for the company's entitlement to the PDV tax offset in respect of the film.
An application to the Arts Minister for such a final certificate is considered by the Film Certification Advisory Board, comprising industry representatives and a senior official from the Department of the Environment, Water, Heritage and the Arts, which advises the Minister on whether to issue a final certificate.
Broadly, the Arts Minister must be satisfied of the following:
- The film is of an eligible format and genre.
- The company's total QAPE related to PDV production for the film is at least $5 million.
- The company has either carried out, or made the arrangements for carrying out, all the activities in Australia necessary for the PDV production for the film.
PDV production for a film is:
- the creation of audio or visual elements (other than principal photography, pick-ups or the creation of physical elements such as sets, props or costumes) for the film
- the manipulation of audio or visual elements (other than pick-ups or physical elements such as sets, props or costumes) for the film
- activities that are reasonably related to the activities mentioned above.
This includes expenditure on VFX, 2D and 3D animation, audio post, editing, green-screen photography and miniatures undertaken in Australia. See Australian screen production incentiveExternal Link for a more extensive list of activities and further details of the application process for certification, guidelines and eligibility criteria.
The company's total QAPE related to PDV production for the film is determined as part of the final certification process for the PDV tax offset and that information along with a copy of the final certificate is provided to us to enable us to verify claims and process payment of the PDV tax offset.
The Minister (and Screen Australia in relation to the producer tax offset) has the power to revoke certificates in cases of fraud or serious misrepresentation. In such a case a revocation would require a full repayment of any film tax offset given. Decisions not to issue or to revoke a certificate previously issued are reviewable in the Administrative Appeals Tribunal.
For further information about location and PDV tax offsets, including certification, go to the Department of Communications and the ArtsExternal Link website.