Oz changes incentives for foreign productions
No longer have to spend at least 70% of budget in AustraliaSYDNEY -- Foreign productions wishing to shoot in Australia will no longer have to spend a minimum of 70% of their budget here in order to qualify for Australia's 15% locations rebate, while the threshold for productions to receive the post digital and visual effects incentive will be reduced from AUS$5 million ($4.5 million) to $450,000, Australia's arts minister Peter Garrett said Tuesday.
The changes to the incentives scheme were announced as part of the government's annual budget allocations, and will "provide a fresh boost for the Australian film industry", as well as rebuildign the attractiveness of Australia for forign productions, which has dropped
off considerably in recent years, mostly due to the increase in the value of the Australian dollar.
"In recent years the requirement for large offshore productions to spend 70 per cent of their budget locally has been a factor in some productions not coming to Australia, particularly smaller budget films wanting to shoot here as one of multiple international locations,"
As a result the government will remove the minimum 70% spend requirement under the Location Offset for productions valued between $13.5.0 million and $45.0 million. The offset allows for a 15% tax rebate to given to qualifying productions.
"The amendments to the eligibility requirements in the tax law will remove some of the barriers to significant offshore productions considering Australia as a production destination and will help local PDV providers to bid for additional work overseas," Garrett said.
They will also enable more Australian businesses, particularly small businesses, to benefit from the film tax offsets, he added. The changes are "part of an initial Government response to issues affecting the film industry" and were made in response to intense lobbying from the sector.
The government is currently conducting a review into the viability of the production sector following the introduction of the producer offset three years ago.