Finance Act 2018
|
Chapter 5 Corporation Tax | ||
|
Amendments relating to relief for investment in films | ||
|
26. (1) Section 481 of the Principal Act is amended— | ||
(a) in subsection (1)— | ||
(i) by inserting the following definitions— | ||
“ ‘assisted region’ means an area specified in paragraph (1) of the Annex to the Commission Decision C(2014) 3153; | ||
‘certificate’ means a certificate issued by the Minister under subsection (2); | ||
‘eligible expenditure’ means the portion of the total cost of production of a qualifying film that is expended on the production of the film in the State— | ||
(a) directly by the qualifying company concerned on the employment of eligible individuals, in so far as those individuals exercise their employment in the production of the film, and | ||
(b) directly or indirectly by the qualifying company concerned, on the provision of certain goods, services and facilities, | ||
as set out in regulations made under subsection (2E); | ||
‘Rescuing & Restructuring Guidelines’ means the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty6 ; | ||
‘total cost of production’, in relation to a qualifying company, means the qualifying expenditure, as determined in accordance with regulations made under subsection (2E), that was wholly, exclusively and necessarily incurred to produce the film; | ||
‘undertaking’ means the relevant economic unit that would be regarded as an undertaking for the purposes of the Rescuing & Restructuring Guidelines; | ||
‘undertaking in difficulty’ has the meaning assigned to it by the Rescuing & Restructuring Guidelines.”, | ||
(ii) by deleting the definition of “authorised officer”, | ||
(iii) in the definition of “film” by substituting “Minister under subsection (2)” for “Revenue Commissioners under subsection (2A), as specified in regulations made under subsection (2E)”, | ||
(iv) in the definition of “film corporation tax credit” by substituting “qualifying film, subject to subsection (1B), means” for “qualifying film, means”, | ||
(v) in the definition of “producer company”— | ||
(I) by deleting “in relation to a film corporation tax credit specified in a film certificate,”, | ||
(II) in paragraph (b) by deleting “commencing not later than the time the qualifying period commences,”, | ||
(III) in paragraph (d) by deleting “and”, | ||
(IV) in paragraph (e)— | ||
(A) by deleting “, on or before the specified return date,”, | ||
(B) by substituting “as the case may be, and” for “as the case may be,”, | ||
and | ||
(V) by inserting the following after paragraph (e): | ||
“(f) is not part of an undertaking which would be regarded as an undertaking in difficulty;”, | ||
(vi) in the definition of “qualifying film” by substituting “Minister has issued a certificate under subsection (2)” for “Revenue Commissioners have issued a certificate under subsection (2A), which has not been revoked under subsection (2D)”, | ||
(vii) in the definition of “qualifying period”— | ||
(I) by deleting “specified in a film certificate,”, and | ||
(II) in paragraph (a) by substituting “the claim referred to in subsection (2G) was made” for “the application referred to in subsection (2A)(a) was made”, | ||
and | ||
(viii) in the definition of “specified relevant person” by substituting “date referred to in subsection (2C)(d).” for “date the compliance report referred to in subparagraph (iii) of subsection (2C)(d)(iii) is provided to the Revenue Commissioners;”, | ||
(b) by inserting the following after subsection (1)— | ||
“(1A) (a) Subject to the provisions of this section, a producer company, that is not an undertaking in difficulty, may make an application to the Minister, in relation to a film to be produced by the company, for the issue by the Minister of a certificate stating that the film is to be treated as a qualifying film for the purpose of this section. | ||
(b) An application for a certificate under paragraph (a) shall be in the form approved by the Minister and shall contain such information as may be specified in regulations made under subsection (2E). | ||
(1B) (a) (i) Where the production of a qualifying film will take place in an assisted region, the producer company, in making its application under subsection (1A) on or after 1 January 2019, may apply for the certificate mentioned in that subsection to specify, in addition to that mentioned in that subsection, that an increased film corporation tax credit (in this section referred to as ‘the regional film development uplift’) shall apply as provided for in paragraph (b). | ||
(ii) In considering whether, in the certification applied for, he or she should specify that the regional film development uplift shall apply, the Minister, in accordance with regulations made under subsection (2E), shall have regard to the following criteria: | ||
(I) whether the production of the film will substantially be undertaken in an assisted region; | ||
(II) whether there is limited availability of individuals with suitable experience or training who habitually reside within a 45 kilometre radius of the place of production to provide services, amounts expended upon which would form part of the eligible expenditure on the qualifying film; and | ||
(III) in respect of the areas of expertise where there is limited availability, whether the company will provide training for individuals that habitually reside within that 45 kilometre radius. | ||
(b) Where the certificate issued specifies that the regional film development uplift is to apply, the percentage specified in the definition of ‘film corporation tax credit’ shall be— | ||
(i) as respects claims made on or before 31 December 2020, 37 per cent, | ||
(ii) as respects claims made after 31 December 2020 but on or before 31 December 2021, 35 per cent, | ||
(iii) as respects claims made after 31 December 2021 but on or before 31 December 2022, 34 per cent, or | ||
(iv) as respects claims made after 31 December 2022, 32 per cent, | ||
and, for the purposes of this paragraph, a reference to a claim is a reference to the first claim that a producer company makes in respect of a qualifying film under subsection (2G).”, | ||
(c) in subsection (2)— | ||
(i) by substituting the following for paragraph (a): | ||
“(a) The Minister may, following an application by a producer company under subsection (1A), subject to paragraph (b) and in accordance with regulations made under subsection (2E), issue a certificate to the producer company— | ||
(i) stating that the film is to be treated as a qualifying film for the purpose of this section, and | ||
(ii) specifying whether or not the regional film development uplift applies, if appropriate.”, | ||
and | ||
(ii) in paragraph (b)— | ||
(I) by substituting “issue the certificate” for “give the authorisation”, | ||
(II) by substituting the following for subparagraph (i): | ||
“(i) the categories of films eligible for certification under this section, as specified in those regulations,”, | ||
(III) by inserting the following after subparagraph (ii): | ||
“(iii) the timing of the application by reference to the commencement of production in the State, and | ||
(iv) the criteria specified in subsection (1B)(a)(ii) if appropriate,”, | ||
(IV) by substituting “a certificate is issued” for “such authorisation is given”, | ||
(V) by substituting “the certificate such conditions” for “the authorisation such conditions”, | ||
(VI) in clause (II)(B) by substituting “production of that film,” for “production of that film.”, | ||
and | ||
(VII) by inserting the following after clause (II): | ||
“(III) the nature and detail of acknowledgement in the opening titles or closing credits of the film, and | ||
(IV) in respect of the Communication from the Commission (2013/C 332/01)7 | ||
(A) the maximum aid intensity, and | ||
(B) whether the film may be regarded as a difficult audiovisual work. | ||
(c) Nothing in this section shall be construed as obliging the Minister to issue a certificate. | ||
(d) The Minister may amend or revoke any condition (including a condition added by virtue of this paragraph) specified in the certificate, or add to such conditions, by giving notice in writing to the producer company concerned of the amendment, revocation or addition, and this section shall apply as if— | ||
(i) a condition so amended or added by the notice was specified in the certificate, and | ||
(ii) a condition so revoked was not specified in the certificate.”, | ||
(d) in subsection (2A)— | ||
(i) by deleting paragraph (a), | ||
(ii) in paragraph (b)— | ||
(I) by substituting— | ||
“A producer company shall not make a claim for the film corporation tax credit under subsection (2G) if— | ||
(i) there has not been issued to the producer company a certificate by the Minister in respect of that film,” | ||
for | ||
“The Revenue Commissioners shall not issue a certificate under paragraph (a) if— | ||
(i) they have not been given authorisation to do so by the Minister under subsection (2)(a),”, | ||
(II) in subparagraph (iii) by substituting “€125,000,” for “€125,000, or”, | ||
(III) in subparagraph (iv) by substituting “€250,000,” for “€250,000.”, | ||
(IV) by inserting the following after subparagraph (iv): | ||
“(v) it is an undertaking in difficulty, | ||
(vi) any company in an undertaking of which the producer company is part is subject to an outstanding recovery order following a previous decision of the Commission that declared an aid illegal and incompatible with the internal market, or | ||
(vii) in relation to a claim under subsection (2G)(b)(i)— | ||
(I) the agreements pursuant to which the financing of the film will be made available have not been executed, or the conditions that are required to be satisfied in those agreements for funding to commence have not been fulfilled, and | ||
(II) an amount not less than 68 per cent of the amount on which the film corporation tax credit is based has not been lodged to an account held by the qualifying company with a financial institution on terms whereby such amount is to be expended by the qualifying company on the production of the film, | ||
but neither clause (I) nor (II) shall apply where such other confirmations of financing, as set out in regulations under subsection (2E) and specified by those regulations to be acceptable for this purpose, are available.”, | ||
(iii) by deleting paragraphs (c) to (e), | ||
(iv) by substituting the following for paragraph (f): | ||
“(f) A producer company shall not make a claim under subsection (2G) if it would be reasonable to consider that— | ||
(i) in respect of a claim under subsection (2G)(b)(i), the budget or any particular item of proposed expenditure in the budget is inflated, or | ||
(ii) (I) there is no commercial rationale for the corporate structure— | ||
(A) for the production, financing, distribution or sale of the film, or | ||
(B) for all of those purposes, | ||
or | ||
(II) the corporate structure would hinder the Revenue Commissioners in verifying compliance with any of the provisions governing the relief.”, | ||
(v) by deleting paragraph (g) and (h), and | ||
(vi) by inserting the following after paragraph (h): | ||
“(i) Before making a claim a producer company shall have such information and records as the Revenue Commissioners may reasonably require for the purposes of determining whether that claim complies with this section.”, | ||
(e) in subsection (2B)— | ||
(i) in paragraph (a) by substituting “them,” for “them, and”, | ||
(ii) in paragraph (b) by substituting “consultation, and” for “consultation.”, and | ||
(iii) by inserting the following after paragraph (b): | ||
“(c) where they have reason to believe that financial arrangements have been entered into in contravention of subsection (2C)(b), the Revenue Commissioners may seek any information they consider appropriate in relation to the arrangements or in relation to any person who is, directly or indirectly, a party to the arrangements.”, | ||
(f) in subsection (2C)— | ||
(i) by substituting “producer company in respect of a qualifying film for the purposes of this section” for “producer company for the purposes of this section”, | ||
(ii) by deleting paragraph (a), | ||
(iii) in paragraph (b)— | ||
(I) by deleting “subject to subsection (2CA),”, and | ||
(II) by inserting the following after subparagraph (ii): | ||
“other than where those arrangements— | ||
(A) relate to the filming of part of the qualifying film in a territory other than a territory referred to in clause (I) or (II) of subparagraph (i), | ||
(B) the producer company has sufficient records to enable the Revenue Commissioners to verify, in the case of filming in such a territory, the amount of each item of expenditure on the production of the qualifying film expended in the territory, whether expended by the producer company or by any other person, and | ||
(C) the producer company has such records in place to substantiate such expenditure in advance of making a claim under subsection (2G).”, | ||
(iv) in paragraph (c) by substituting “without prejudice to the generality of section 886, unless the company provides, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (2),” for “unless the company provides, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by them under subsection (2A)(a),”, | ||
(v) by inserting the following after paragraph (c): | ||
“(ca) unless the company provides, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (2) a copy of the film in such format and manner required under paragraph (d)(ii).”, | ||
(vi) in paragraph (d) by substituting the following for subparagraphs (i) to (iii): | ||
“(i) notifies the Minister in writing of the date of completion of the production of the qualifying film, and | ||
(ii) provides to the Minister such number of copies of the film in such format and manner as may be specified in those regulations.”, | ||
(vii) by inserting the following after paragraph (d): | ||
“(da) makes a claim under subsection (2G)(b)(ii), within the time referred to in paragraph (d), and has available, prior to making that claim, a compliance report, in such format and manner specified in those regulations, which provides proof that— | ||
(i) the provisions of this section in so far as they apply in relation to the company and a qualifying company have been met, and | ||
(ii) any conditions attaching to the certificate issued to the company in relation to a qualifying film have been fulfilled,”, | ||
(viii) in paragraph (e) by substituting “date referred to in paragraph (d)” for “date the compliance report referred to in subsection (2C)(d)(iii) is provided to the Revenue Commissioners”, | ||
(ix) in paragraph (f) by substituting “date referred to in paragraph (d), and” for “date the compliance report referred to in subsection (2C)(d)(iii) is provided to the Revenue Commissioners”, | ||
(x) in paragraph (g)(ii) by substituting “qualifying company.” for “qualifying company, and”, and | ||
(xi) by deleting paragraph (h), | ||
(g) by deleting subsections (2CA) and (2D), | ||
(h) in subsection (2E)— | ||
(i) by substituting “the issue of a certificate under subsection (2)” for “the issue of an authorisation under subsection (2)”, | ||
(ii) in paragraph (a) by substituting “, the timing of such an application” for “pursuant to subsection (2A)”, | ||
(iii) in paragraph (b) by deleting “by the Revenue Commissioners under subsection (2A)”, | ||
(iv) by deleting paragraph (c), | ||
(v) in paragraph (f) by substituting “Minister” for “Revenue Commissioners”, | ||
(vi) in paragraph (g) by deleting “the Revenue Commissioners and to”, | ||
(vii) by substituting the following for paragraph (h): | ||
“(h) specifying the form and content of the compliance report that must be available in accordance with subsection (2C)(d)(iii), the manner in which such report shall be made and verified, and the documents to accompany the report,”, | ||
(viii) in paragraph (i) by substituting “treated as qualifying or eligible” for “accepted by the Revenue Commissioners as”, | ||
(ix) in paragraph (j) by substituting “in the definition of eligible expenditure” for “in subsection (2A)(g)(iv)(II)”, | ||
(x) in paragraph (l)— | ||
(I) by substituting “subsection (2)(b)” for “subsections (2)(b)(i) and (ii)”, | ||
(II) in subparagraph (i) by substituting “issue a certificate” for “give authorisation to the Revenue Commissioners”, | ||
(III) in subparagraph (ii) by substituting “certificate” for “authorisation”, and | ||
(IV) by substituting “Minister” for “Revenue Commissioners under subsection (2A)”, | ||
(xi) by inserting the following after paragraph (l): | ||
“(la) specifying the criteria to be considered by the Minister, in relation to the matters referred to in subsection (1B)(a)(ii)— | ||
(i) in deciding whether, in the certificate applied for under subsection (1A), he or she should specify that the regional film development uplift shall apply, and | ||
(ii) in specifying conditions in such a certificate, as provided for in subsection (2)(b), | ||
and the information required for those purposes to be included in the application made to the Minister by a producer company,”, | ||
(xii) in paragraph (m)— | ||
(I) by deleting “the approval of”, and | ||
(II) by substituting “subsection (2C)(b)” for “subsection (2CA)”, | ||
(xiii) by inserting the following after paragraph (m): | ||
“(ma) specifying the confirmations of financing that are acceptable for the purpose of subsection (2A)(b)(vii),”, | ||
(xiv) in paragraph (n) by deleting “, as referred to in subsection (2A)(g)(iv),”, | ||
(xv) by substituting the following for paragraph (o): | ||
“(o) governing the payment of the specified amount by the Revenue Commissioners to the producer company.”, | ||
(i) by deleting subsection (2F), | ||
(j) by inserting the following after subsection (2F): | ||
“(2G) (a) In this section the ‘budgeted film corporation tax credit’ means the amount of the film corporation tax credit that would be payable if the amounts set out in the budget in respect of a qualifying film to be produced were incurred on the production of that qualifying film. | ||
(b) Where the Minister has issued a certificate in relation to a qualifying film to a producer company and the provisions of this section have been complied with, a producer company may make a claim— | ||
(i) in advance of the date referred to in subsection (2C)(d), for an amount not exceeding 90 per cent, or such lower amount as set out in regulations under subsection (2E), of the budgeted film corporation tax credit, or | ||
(ii) in any other case, for the film corporation tax credit, less any amount already claimed pursuant to subparagraph (i). | ||
(c) A claim under paragraph (b) shall be made in the return required under Part 41A, the specified return date of which immediately precedes the making of the claim.”, | ||
(k) in subsection (3)— | ||
(i) by substituting the following for paragraph (a): | ||
“(a) Where a producer company makes a claim under subsection (2G), the corporation tax of the company, for the qualifying period, shall be reduced by so much of an amount equal to the film corporation tax credit as does not exceed that corporation tax and where the qualifying period is a period referred to in paragraph (b) of the definition of ‘qualifying period’, the corporation tax of an earlier accounting period shall be reduced in priority to the corporation tax of a later accounting period.”, | ||
(ii) in paragraph (b) by substituting “a producer company has made a claim under subsection (2G)” for “the Revenue Commissioners have specified a film corporation tax credit in a film certificate”, and | ||
(iii) by deleting paragraph (c), | ||
(l) in subsection (3A)— | ||
(i) in paragraph (d)— | ||
(I) by substituting “the amount was claimed under subsection (2G) or paid” for “the amount was paid”, | ||
(II) by substituting the following for subparagraph (i): | ||
“(i) the company made a claim contrary to subsection (2G),”, | ||
(III) in subparagraph (ii)— | ||
(A) in clause (II) by substituting “certificate” for “film certificate” in both places where it occurs, and | ||
(B) in clause (III) by substituting “subsection (2A)(b)(ii),” for “subsection (2A)(b)(ii).”, | ||
and | ||
(IV) by inserting the following after subparagraph (ii): | ||
“or | ||
(iii) where a claim is made under subsection (2G)(b)(i) and— | ||
(I) there has occurred a reduction in the expenditure, from the amount as stood budgeted, in respect of the qualifying film and the extent of that reduction is such that the amount claimed is in excess of 90 per cent of the revised budgeted film corporation tax credit (that is to say, that tax credit as it stands revised in consequence of that reduction), or | ||
(II) where an amount equal to the budgeted eligible expenditure upon which a claim was based is not expended by the qualifying company wholly and exclusively on the production of the qualifying film without unreasonable delay.”, | ||
and | ||
(ii) in paragraph (e) by substituting “an assessment is made or amended” for “an inspector makes an assessment”, | ||
(m) in subsection (3C) by substituting “a certificate issued after 31 December 2024” for “a film certificate issued after 31 December 2020”, | ||
(n) by deleting subsection (22A), and | ||
(o) by inserting the following after subsection (23): | ||
“(24) (a) This subsection applies to a qualifying film in respect of which the Minister provided the Revenue Commissioners with authorisation under subsection (2), as it stood enacted prior to the commencement of section 26 of the Finance Act 2018. | ||
(b) This section (that is to say, this section as it stands amended by section 26 of the Finance Act 2018) shall apply to a qualifying film to which this subsection applies as if the foregoing authorisation were a certificate issued by the Minister to the producer company under subsection (2) on the date the authorisation was issued. | ||
(25) (a) This subsection applies to a qualifying film in respect of which the Revenue Commissioners had issued a certificate under subsection (2A), as it stood enacted prior to the commencement of section 26 of the Finance Act 2018, but the compliance report required under subsection (2C)(d)(iii), as it stood enacted prior to the commencement of that section 26 , has not been provided to the Revenue Commissioners. | ||
(b) This section (that is to say, this section as it stands amended by section 26 of the Finance Act 2018) shall apply to any claim for relief made in respect of a qualifying film to which this subsection applies, and no regard shall be had to the foregoing certificate. | ||
(26) (a) This subsection applies to a payment made by the Revenue Commissioners under subsection (3)(b), as it stood enacted prior to the commencement of section 26 of the Finance Act 2018, but where the compliance report required under subsection (2C)(d)(iii), as it stood enacted prior to the commencement of that section 26 , has not been provided to the Revenue Commissioners. | ||
(b) Any amount, to which this subsection applies, paid to a producer company shall be treated as an amount paid on a claim made under subsection (2G)(b)(i) on 1 January 2019. | ||
(27) (a) This subsection applies to financial arrangements which were approved by the Revenue Commissioners under subsection (2CA), as it stood enacted prior to the commencement of section 26 of the Finance Act 2018. | ||
(b) Notwithstanding any such approval, a company shall not be a producer company if the financial arrangements to which this subsection applies contravene subsection (2C)(b).”. | ||
(2) Section 851A of the Principal Act is amended by inserting the following subsection after subsection (8A): | ||
“(8B) In relation to information provided to the Minister for Culture, Heritage and the Gaeltacht by a company for the purposes of obtaining a certificate under section 481, the Department of Culture, Heritage and the Gaeltacht, in processing such information, shall, for the purposes of this section, be deemed to be engaged as a service provider with respect to the administration of section 481.”. | ||
(3) Subsections (1) and (2) shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions. | ||