The producer tax offset
The producer tax offset is a refundable tax offset for Australian expenditure in making Australian films. The amount of the producer tax offset is:
- 40% of the company’s total QAPE on a feature film
- 20% of the company’s total QAPE on a film that is not a feature film.
The producer tax offset applies only to QAPE incurred on or after 1 July 2007.
The producer tax offset is available to a company for the making of an Australian film when the following conditions are met:
- The ‘film authority’ (currently Screen Australia) has issued to the company a final certificate for the film in relation to the producer tax offset.
- The company claims the tax offset in its income tax return for the income year in which the film was completed.
- The company is either an Australian resident or a foreign resident with a permanent establishment in Australia and an Australian business number (ABN).
- The company has not been provided with financial assistance for the film under Screen Australia's Producer Equity Program.
The issue by Screen Australia of a final certificate to a company for a film in relation to the producer tax offset is the central requirement for the company’s entitlement to the producer tax offset in respect of the film. Screen Australia will issue such a final certificate to a company only where it is satisfied the criteria set out in Division 376 of the ITAA 1997 for the issue of such a certificate have been met.
Broadly, Screen Australia must be satisfied that:
- the film is completed
- the film has ‘significant Australian content’ or it is an official co-production between Australia and another country
- the film is of an eligible format and genre
- the applicant company has either carried out, or made the arrangements for carrying out, all the activities necessary for the making of the film
- the company’s total QAPE on the film meets or exceeds relevant thresholds.
For more information on the producer tax offset certification, including QAPE thresholds, and what is ‘significant Australian content’ and an eligible format and genre, go to screenaustralia.gov.au/producer_offsetExternal Link
As part of the process of assessing an application for the final certificate, Screen Australia will formally determine the company’s total QAPE on the film for the purposes of the producer tax offset. For a full discussion on what constitutes QAPE, go to screenaustralia.gov.au/producer_offset/qual_expenditure.aspExternal Link
Screen Australia will also provide a copy of the final certificate and its determination of the company’s total QAPE on the film to us to enable us to verify claims. We will not reconsider that determination or aspects of Screen Australia’s final certification process.
Once the company claims the producer tax offset in its income tax return for the income year in which the film was completed, we will calculate the company’s producer tax offset based on the final certificate issued by Screen Australia and its determination of the company’s total QAPE on the film. We will then apply that tax offset against the company’s Australian tax liability for the income year in which the film was completed, and refund any remainder to the company.
For more information about producer tax offset certification, see screenaustralia.gov.au/producer_offset/final_certification.aspExternal Link
Last modified: 26 May 2016QC 48086