Jump in tv and film productions using tax incentives

Crime drama 'Kin', which starred Ciarán Hinds and Emmet Scanlon, utilised the Section 148 tax credit.

Netflix movie The Irish Wish starring Lindsey Lohan, season 2 of Irish crime drama Kin, and a co-production between Lithuania, Ireland, and Latvia called 5 & 1⁄2 Love Stories in an Apartment in Vilnius were among the productions that cashed in on an attractive Irish film tax break this year.

Section 481 offers a 32% corporation tax credit and is available for eligible spending on a film or television programme produced in Ireland, 80% of the total cost of the production of the film or €70m.

In the first quarter, 24 productions received the credit which is up substantially from 16 productions in the first quarter of last year.

The figures provided by Revenue suggest that movie makers could be ramping up activity following around two years of work stoppages imposed by the pandemic. 

Or they could be availing of the tax relief before it is impacted by any future changes.

One significant change for producers this year is the winding down of the Regional Uplift Scheme, which was introduced under Section 481 to grow audio-visual content outside of Dublin and commuting areas.

“There are currently no plans to amend or extend the regional uplift or to introduce alternative proposals for regional-specific changes to Section 481,” said Finance Minister Michael McGrath in response to a parliamentary question this year.

The uplift originally provided an increased level of credit for four years, with 5% available in 2019 and 2020, 3% available in 2021, and 2% available in 2022.

However, in response to the detrimental impact the pandemic had on the audio-visual sector, the Finance Act 2020 amended the regional uplift to provide for an additional 5% year in 2021. 

The tapered withdrawal of the uplift then continued in 2022 with the planned reduction to 3%. 

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It has been reduced to 2% in 2023 and will be unavailable next year.

In terms of new changes on the horizon, last month the budgetary oversight committee published a report on Section 481 including several recommendations on how it could be altered.

One of the recommendations referred to the claiming process and the committee proposes a reduced amount of funding be made available upfront based on budgeted expenditure (which is currently 90%), and the balance claimed on completion, “as a means of encouraging compliance with the criteria”.

Meanwhile, although the audiovisual industry is experiencing momentum again in Ireland post-covid, there are some pre-existing limitations that could stifle growth. For example, the €70m cap.

The committee proposed that the €70m cap either be increased or scrapped in a bid to make Ireland more attractive to producers.

The committee spoke with leading production company Element Pictures, the producer of the hit television adaption of Sally Rooney’s Normal People, and they informed them that “the single biggest aspect affecting investment in the audio-visual industry at present is the €70m cap”, the report said.

Daisy Edgar Jones as Marianne and Paul Mescal as Connell in 'Normal People.'

Elaborating on this, Element Pictures notes that if they were seeking to start a project costing €150m only €70m of that would qualify for the Section 481 credit with no additional benefit for the rest of the spend.

This puts Ireland at a competitive disadvantage as Britain and Hungary have no cap for a project costing €150m.

The committee said addressing the cap would attract bigger projects and allow the development of larger studios and boost employment.

Overall, Section 481 has been an important pillar of the film industry in Ireland and has been extended until at least 2028. 

Some of the most acclaimed movies in recent times have benefited from it. 

Amongst them are Cartoon Saloon’s Breadwinner starring Angelina Jolie and the harrowing depiction of the famine in Black 47.

While Section 481 may not be the silver bullet for some companies trying to get their stories out to the public, the production space in Ireland remains a vibrant one with new entrants constantly emerging. 

And two Irish actors recently decided to tap into the market with their own company.

Kate Gilmore and Fionnuala Gygax took inspiration from fellow actors Sharon Horgan and Olivia Coleman and decided to get set up production company, Two Sparks, to try and speed up the process of getting their stories on screens.

“There's always going to be enough room if the work is good enough for as many actors and for as many writers,” said Ms Gya.