Eligibility: Significant australian content
- Screen Australia must be satisfied that the project has a significant level of Australian content, referred to as ‘meeting the SAC test’. Section 376-70(1) of the Income Tax Assessment Act 1997 (ITAA) specifies that, in determining whether a project has significant Australian content, we must have regard to the following:
- the subject matter of the film
- the place where the film was made
- the nationalities and places of residence of the persons who took part in the making of the film
- the details of the production expenditure incurred in respect of the film, and
- any other matters that we consider to be relevant.
‘Australia’ in this context does not include New Zealand (Acts Interpretation Act 1901).
An official co-production is also eligible for the Producer Offset and is not required to meet the SAC test; by definition it is considered to be an 'Australian film'.
You can apply for provisional approval as an official co-production and for a provisional certificate for the Producer Offset at the same time.
For further information on Australia’s official co-production program, visit the Co-production program section of the website, and contact the POCU.
Meeting the SAC test
The SAC test is a cultural test to determine whether a project has significant Australian content to qualify for an Australian tax rebate. Whether a project satisfies the SAC test is a matter of judgment for Screen Australia, having regard to the matters listed in the ITAA.
The elements of the SAC test are matters to be considered and are not ‘criteria’ that must be met. We consider all relevant factors as part of a holistic test, applied on a case-by-case basis, to determine whether a project has significant Australian content. No single factor is determinative.
You should not expect that your project meets the SAC test merely because it is undertaking pre, production and post in Australia, and crew and below-the-line cast are Australian nationals. However, such a project may be eligible for the Location Offset if it fails to meet the SAC test.
Interpreting the 'matters to be considered'
We interpret subject matter of the film as requiring us to determine the extent to which the ‘look and feel’ of the project is Australian or the project has a significant creative connection with Australia; particularly testing if there has been a meaningful and substantial Australian influence in the development of the subject matter for the film. While a project need not necessarily be set in Australia or about Australians, such a project would clearly begin with a strong claim against this matter if it was.
We interpret the place where the film was made as requiring us to determine the extent to which the project is to be produced in Australia, taking into account each phase of the production cycle separately (pre-production, production and post-production).
The nationalities and places of residence of the producer, writer and director are particularly important, as are lead cast and Heads of Department, but we also have regard to supporting cast, below-the-line crew and other service providers.
We will consider someone to be ‘Australian’ if that person is a citizen of Australia (no matter where they reside) or if they are an Australian permanent resident (regardless of their nationality). However, for people who are not Australian citizens or permanent residents, but are nonetheless resident in Australia, we may take into account the length of their residency in Australia, on a case-by-case basis.
We will take into account the extent to which the project’s production expenditure contributes to the Australian film industry. The following factors are taken into account:
- the extent to which expenditure is made to Australian citizens or residents, and
- the extent to which expenditure is incurred within Australia (i.e. on goods and services provided in Australia).
Lastly, we must take into account any matter we consider relevant in the circumstances of the project. For example, we may take into account:
- the extent to which copyright ownership resides with Australians, in particular whether this is commensurate with the proportion of the budget provided by Australians
- the extent to which creative control rests with Australian citizens or residents, and
- the extent to which there is profit participation for Australian nationals or residents and the extent to which that is commensurate with ownership.
However, we will also consider any other factors we consider relevant to whether a specific project has significant Australian content on a case-by-case basis. In your application, you may set out any matters that you consider will increase the project’s claim against the SAC test.
Administration of the SAC test
If your project has a number of non-Australian elements, you should anticipate that we may need additional information in order to assess the project’s claim against the SAC test.
Such information may include:
- a development timeline demonstrating the length of association of Australians with the project
- agreements with key creatives which define their length of association and level of creative control and input
- copies of earlier screenplays which demonstrate the length of association and extent of impact of Australians in the development of the project
- location survey photos that identify the impact of the Australian landscape on the project, and
- anything else that you consider relevant.