The tax break has traditionally been handled as a certification rather than a self-assessment claim, meaning that tax officials must inspect and sign off on every application. This, according to the briefing note, “involves a huge volume of compliance work being carried out by a very small team”. The fact that the credit was self assessed “renders a lot of the work of that team inefficient”.
The tax relief, known as section 481, can be worth millions to individual films. It allows a credit for whichever is the lowest of 32 per cent of eligible Irish expenditure, 80 per cent of all expenditure, or €70 million. The maximum tax credit available to any single film is €22.4 million. The report also flagged concerns around the overstatement of expenses for payments to related parties “and the difficulty in policing any such overstatement” and said that arising from the treatment of film rights under the Act “there is a risk that where the Irish companies own the rights to exploit a film, the resultant revenues are being artificially diverted outside of Ireland”.
James Hickey, chief executive of Screen Ireland, said “an efficient tax incentive plays a central role in developing Ireland as a global media production hub through attracting large-scale international productions and developing a flourishing indigenous sector”.
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