INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 376 - Films generally (tax offsets for Australian production expenditure)  

Subdivision 376-C - Production expenditure and qualifying Australian production expenditure  

Production expenditure - common rules

SECTION 376-135   376-135   Production expenditure - specific exclusions  


Despite sections 376-125 and 376-130 , the following expenditure of a company is not production expenditure of the company on a * film, except to the extent, if any, as mentioned in column 3 of the table:


Expenditure that does not count as production expenditure on a film
Item This kind of expenditure by the company is not production expenditure ... except to the extent to which the expenditure is ...
1 Financing expenditure
expenditure incurred by way of, or in relation to, the financing of the * film (including returns payable on amounts invested in the film and expenditure in relation to raising and servicing finance for the film)
*qualifying Australian production expenditure under item 6 of the table in subsection 376-150(1) and paragraph (a) of item 5 of the table in subsection 376-170(2)
2 Development expenditure
* development expenditure on the * film
* qualifying Australian production expenditure under item 1 of the table in subsection 376-150(1)
3 Copyright acquisition expenditure
expenditure incurred in acquiring copyright, or a licence in relation to copyright, in a pre-existing work for use in the * film
* qualifying Australian production expenditure under item 2 of the table in subsection 376-150(1)
4 General business overheads
expenditure incurred to meet the general business overheads of the company that:
(a) are not incurred in, or in relation to, the * making of the * film; and
(b) are not reasonably attributable to:
    (i) the use of equipment or other
    facilities for; or
    (ii) activities undertaken in;
the making of the film
* qualifying Australian production expenditure under item 1 of the table in subsection 376-165(1) or item 1 of the table in subsection 376-170(2)
5 Publicity and promotion expenditure
expenditure incurred in publicising or otherwise promoting the * film (including press expenses, still photography, videotapes, public relations and other similar expenses)
*qualifying Australian production expenditure under item 3 or 4 of the table in subsection 376-150(1) or item 6 of the table in subsection 376-170(2)
6 Deferments
amounts that are payable only out of the receipts, earnings or profits from the * film
7 Profit participation
amounts that:
(a) depend on the receipts, earnings or profits from the * film; or
(b) are otherwise dependent on the commercial performance of the film
8 Residuals
amounts payable in satisfaction of the residual rights of a person who is a member of the cast
paid out by the company before the * film is * completed
9 Advances
amounts paid by way of advance on a payment to which item 6, 7 or 8 applies to the extent to which it may become repayable by the person to whom it is paid
10 Acquisition of depreciating asset
expenditure to the extent to which it sets, or increases, the * cost of a * depreciating asset
This item has effect subject to subsections 376-125(6) and (7) .
* qualifying Australian production expenditure under item 2 of the table in subsection 376-150(1)
11 Regulations
expenditure specified in regulations


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