There are three principal Australian Government incentives to support screen production in Australia:
- the Producer Offset
- the Location Offset
- the Post, Digital and Visual Effects (PDV) Offset.
In the last release we have provided an introduction of 'Producer Offset'. We will be introducing 'Location Offset' and 'PDV Offset' to you in this article.
Location Offset and PDV OffsetThe Location Offset is a 16.5% offset on the QAPE incurred on films and eligible television projects shot in Australia with a minimum total QAPE of AUD$15 million. The Location Offset is designed to ensure Australia remains competitive in attracting shoots for large-budget film and television productions, and is aimed at providing increased opportunities for Australian cast, crew, post-production companies and other screen production service providers to participate in these productions.
The PDV Offset is a 30% offset on the QAPE incurred on eligible productions with at least AUD$500,000 Qualifying Australian PDV Expenditure. The PDV Offset is aimed at enabling the Australian visual effects, post production and animation sector to continue to develop its reputation as one of the best in the world, regardless of whether or not the project shoots in Australia.
The general test for QAPE is set out above, however, there are a few special rules that apply to the Location Offset and the PDV Offset (just as there are for the Producer Offset). Eligible applicants - who may apply for the Location and PDV Offsets?The Location Offset or the PDV Offset is available to a company in relation to a film or television project where the following conditions are met:
- the company is either (i) an Australian company; or (ii) a foreign company with an Australian permanent residency and an Australian Business Number;
- in respect of the Location Offset - the offset is claimed by the company in its income tax return for the income year in which QAPE ceased being incurred;
- in respect of the PDV Offset - the offset is claimed by the company in its income tax return for the income year in which QAPE in relation to PDV production ceased being incurred; and
- a final certificate has been issued for the project by the Department.
Only one company may claim the Location Offset or the PDV Offset in relation to a project.
The company that is eligible to claim the Location Offset is the one that carried out, or made the arrangements for the carrying out of, all the activities in Australia that were necessary for the ‘making of the project’.
The company that is eligible to claim the PDV Offset is the one that carried out, or made the arrangements for the carrying out of, all the activities in Australia that were necessary for PDV production for the project.Eligible projects - what types of projects qualify for the Location and PDV Offsets?1. Project must satisfy format requirements
The following types of projects may be eligible for the Location Offset or the PDV Offset:
- feature films (including direct-to-DVD, but excluding documentaries);
- telemovies (excluding documentaries);
- mini-series (excluding documentaries); and
- television series (including reality series and documentaries).
These formats may include animated or live-action productions or a combination of the two. However, the Location Offset and PDV Offset are not available for other types of projects such as advertising programs or commercials, or discussion, quiz, panel or variety programs.
2. Project must meet minimum QAPE threshold
For a project to be eligible for the Location Offset it must incur a minimum of AUD$15 million QAPE on the production of the film. In addition, in respect of television series, projects must spend an average of at least AUD$1 million of QAPE per hour across the length of the series in order to qualify.
For a project to be eligible for the PDV Offset it must incur a minimum of AUD$500,000 PDV-related QAPE.How to obtain the Location and PDV OffsetsTo obtain the Location Offset or the PDV Offset for a project an eligible applicant must obtain a final certificate by submitting an application to the Department.
A company may speak to the Department about the Location Offset and the PDV Offset and/or, prior to commencing a project, or at any time during a project, a company may seek a provisional certificate to identify those costs which can be counted towards QAPE/PDV-related QAPE.Please be looking forward to the Part III - Official International Co-Productions. If you are interested in the Part I - Producer Offset, please click 'history' on the upper right hand button.Ian Robertson, National Managing ParnerThe information in this Article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources. 【We provide excellent expert advice to businesses wishing to invest in Australia.】Our previous news releases for Chinese investors include the following topics:
- Business set up in Australia, business structures, company administration, etc.
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