• The Australian screen production incentive

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    Division 376 of the Income Tax Assessment Act 1997 (ITAA 1997) provides three tax offsets for certain Australian production expenditure incurred by a production company in making a film where a minimum level of expenditure has been incurred. The company is only entitled to one of the three tax offsets in relation to a film. The company can claim the tax offset in its income tax return.

    The three tax offsets are:

    • a refundable tax offset for Australian expenditure in making Australian films, known as ‘the producer tax offset’ (the amount of the producer tax offset is 40% of the company’s total qualifying Australian production expenditure (QAPE) on a feature film or 20% of the company’s total QAPE on a film that is not a feature film)
    • a refundable tax offset for Australian expenditure in making a film, known as ‘the location tax offset’ (the amount of the location tax offset is generally 16.5% of the company’s total QAPE on the film)
    • a refundable tax offset for Australian expenditure on post, digital and visual effects production for a film, known as ‘the PDV tax offset’ (the amount of the PDV tax offset is generally 30% of the company’s total QAPE on the film that relates to post, digital and visual effects production for the film).

    Where the production company has chosen to claim one of the three tax offsets for an eligible film, neither of the other two tax offsets is available in relation to the film. This means that a film may be certified for only one stream of the Australian screen production incentive.

      Last modified: 28 Jun 2013QC 28187