The Film Tax relief under Section 481 will be extended to 2020 but from 2016 it will change to a tax credit model it was announced in the recent budget. It would seem that the cost of the film tax relief is costing the government more than if they gave the money directly to the productions themselves. A recent report has found out a third of the money that could be going to the productions is going to the financiers who organise the Section 481 reliefs.
So how does it work? Basically, individuals who avail of the Film Tax Relief can write off €50,000 against tax as an expense, saving €20,500 at a rate of 41 per cent. It amounts to a net cost to the investor of €29,500 and the investor can usually expect to get the €29,500 back once the film is “in the can” plus a small profit. Nice.
Tax Department, Healy O’Connor Solicitors Cork and Dublin.