The Australian Government releases changes to its PDV Offset, Producer Offset & Location Offset & Incentive.
The Australian Government has announced changes to Australia’s screen content regulation and production support funding and incentives.
The Hon. Paul Fletcher, Minister for Communications, Cyber Safety & the Arts said “The old approach of treating film and television differently no longer makes sense. Increasing the Producer Offset to 30 per cent for television will mean additional funding for Australian television production – and in turn support higher production values and programs with a better prospect of being sold into the global content market, taking advantage of the opportunity created by the explosion of streaming video services like Netflix, Disney+, Stan and Amazon Prime.”
Read the Minister’s Press Release here.
Below Ausfilm has outlined what these changes are in detail. Any questions about the changes to the film tax offsets should be directed to the Office for the Arts via [email protected].
Changes to the Australian Screen Production Incentive and guidelines are as follows:
PDV OFFSET CHANGES
The Post, Digital and Visual Effects (PDV) Offset minimum qualifying Australian production expenditure threshold will be increased from AU$500,000 to AU$1 million.
PDV, LOCATION & PRODUCER OFFSET CHANGES
- The eligibility to claim general business overhead expenses not directly related to the making of the production will be removed across all three tax offsets.
- Claims relating to Australian held copyright will be capped at 30 per cent of total production expenditure across all three offsets.
- As the Location Incentive eligibility reflects that of the Location Offset, the two measures that relate to overheads and copyright will also apply to the Location Incentive.
- the Location Offset & Incentive seeks to encourage international production companies and studios to commit to film multiple productions over multiple years in Australia to support continued employment and investment.
- to be eligible for the Location Offset & Incentive projects must genuinely be ‘footloose’, that is not already locked in to undertaking production in Australia.
- to be eligible Location Offset & Incentive projects must commit to undertaking training and skills development activities; and
- state/territory government support on Location Offset & Incentive projects is required to be commensurate with the benefits that the production will bring to that state or territory.
These changes have been implemented to clarify the objectives of the program and help the Australian Government continue to achieve the strongest outcomes for the government, production studios and the production industry.
Review the revised Location Incentive Program Guidelines here.
PRODUCER OFFSET CHANGES
- The rate of the Producer Offset will be standardised at 30 per cent for eligible film and television production, regardless of the release platform. (Originally it was 20% for TV and 40% for a theatrical feature film).
- The minimum qualifying Australian production expenditure threshold for feature-length content supported through the Producer Offset will increase from AU$500,000 to AU$1 million.
- The 65 commercial hour episode cap for drama series will be removed under the Producer Offset.
- The clause under the Producer Offset that allows production costs incurred in other countries to be claimed (commonly known as the ‘Gallipoli Clause’) will be removed.
- The Producer Offset ‘above the line’ expenses cap of 20 per cent will be extended to include non-feature documentary productions.
DATE OF EFFECT OF CHANGES
For the PDV Offset, these amendments will come into effect for productions that commence post, digital and visual effects activity on, or after 1 July 2021.
For the Producer Offset and Location Offset, these amendments will come into effect for productions that commence principal photography on, or after 1 July 2021.
As the Australian Screen Production Incentive is underpinned by the Income Tax Assessment Act 1997 changes will be implemented through legislative amendments.
Treasury and the Office for the Arts will be responsible for managing the legislative changes.
Any further questions about the Australian Screen Production Incentive changes should be directed to the Office for the Arts via [email protected].
If you have questions about a specific Producer Offset project, these should be directed to Screen Australia via [email protected].
WHY CHANGE?
As noted in the announcement, the Australian Government has made the decision to pursue changes to the Australian Screen Production Incentive in response to the feedback received during the Supporting Australian stories on our screens Options Paper consultations on Australia’s screen tax incentives, content regulations and quotas.
As the Australian Screen Production Incentive is underpinned by the Income Tax Assessment Act 1997 and changes will be implemented through legislative amendments before they come into effect.
