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Investment in the Australian film industry

If you invest in the Australian film industry, you may be eligible for a special tax deduction. NAT 0954-06.2002.

Last updated 12 June 2003

If you invest in the Australian film industry, you may be eligible for a special tax deduction under Division 10BA of the Income Tax Assessment Act 1936. This deduction is for capital expenditure incurred in acquiring an interest in the initial copyright of a new Australian film.

To qualify for a deduction, you must be a resident of Australia who:

  • outlaid capital expenditure in producing the film or as a contribution to its production
  • consequently became the first owner, or one of the first owners, of the copyright of the film and
  • intended to use the copyright to produce assessable income from public exhibition in cinemas or by way of television broadcasting.

The Minister for Communications, Information Technology and the Arts must certify the film as a qualifying Australian film. It must be:

  • an eligible film-that is, a feature film-including an animated feature-length movie, a telemovie, a documentary or a mini-series of television drama produced for exhibition to the public in cinemas or on television and
  • an Australian film-that is, one with a significant Australian content made wholly or substantially in Australia or an external Territory, or a film made as a result of an agreement between the Australian Government and a government of another country.

An Australian film assessed as having significant non-Australian content may be refused certification.

Ultimately, eligibility for a deduction depends on a final certificate being issued when the film is completed. However, you may claim a deduction on the basis of a provisional certificate.

You may be eligible for a deduction for the whole of the amount you expended or contributed.

An investor in a qualifying film who takes the place of an underwriter may be eligible for a deduction.

Receipts from the film including amounts received on the disposal of copyright, are assessable income.

Division 10BA does not apply in working out the net income or loss of a partnership.

You can offset film losses carried forward from prior years only against film income.

Safeguard provisions are in place to ensure that Australian film industry incentives are not exploited.

Claiming a deduction for an investment in a qualifying Australian film must be shown at the correct labels.

You need to be able to provide information if the ATO requests it.

You may be eligible for special tax deductions.

For the 2001-02 income year, companies can claim tax offsets for qualifying Australian production expenditure.