BUDGET 2016: Mixed reaction to rise in film tax credit

In a bid to encourage more investment in Irish films, Finance Minister Michael Noonan has announced another tax break for the industry.

The film tax credit will now rise from €50m to €70m.

“Ireland has a significant opportunity as a location for the production of films and television programmes. Having reviewed the film tax credit, I’m increasing the cap on eligible expenditure to €70m,” said the minister.

“This limit will be kept under review going forward. It is my hope that the industry will now make the necessary investments in studio spaces in order to attract high quality films and create new jobs.”

The move was welcomed by the Irish Film Board (IFB), which said the latest improvement to Section 481 film tax credit will generate growth in the sector.

“The improvement underlines the continuing support of the Irish Government for Irish feature film, television drama and the television animation industry,” the board said in a statement.

“[It] will assist in attracting foreign direct investment in screen content production, generating growth, jobs and exports in the sector.”

John Gleeson, however, as partner and head of media and entertainment at Grant Thornton, said the move was “disappointing”.

He said removing the cap entirely would entice larger productions.

“Large US-based film and television production companies and studios have consistently advised that they will locate large productions in Ireland if more studio space is built here and if we remove the current cap per project,” said Mr Gleeson.

“By not removing the cap today, we are potentially saying no to that opportunity. The €50m cap was high enough to make the production of high-end TV attractive here but too low to attract large studio feature films. There are relatively few TV series or feature films produced in the €50m to €70m cost range.”

As such, he said, large studio films will continue to be shot in the UK instead of Ireland as the UK does not impose a cap.

“There is concrete evidence that the UK tax credit is a net contributor to the UK economy and that their strategy to grow the indigenous industry by attracting US studios to the UK is working,” said Mr Gleeson.