Operation of the Location and PDV Offsets for large-budget productions, 2001–2009

The Location Offset (known as the Refundable Film Tax Offset until July 2007) has been available to eligible production companies since 4 September 2001. The PDV Offset, which supports work on post, digital and visual effects production, has been available to eligible companies since 1 July 2007. To access the offsets, a company must first apply to the Australian Government Department of the Environment, Water, Heritage and the Arts for a certificate of eligibility and determination of Qualifying Australian Production Expenditure
(QAPE)¹ issued by the Minister for the Environment, Heritage and the Arts. The certificate is then submitted with the company’s tax return for the year in which the production is completed.

As of 30 June 2009, 25 feature films and 11 television projects had been certified as eligible for the Offsets. Of these, 33 were foreign, two were co-productions and one was Australian. The QAPE for these productions (as estimated by the Film Certification Advisory Board, which advises the Minister on the scheme) is over $2.06 billion, representing a potential aggregate benefit to the companies of $265.8 million (12.5 per cent of QAPE increasing to 15 per cent for those productions commencing principal photography on or after 1 July 2007).

Source: Department of Environment, Water, Heritage and the Arts, July 2009.

Notes:
1. Total QAPE defines the costs eligible for the 15 per cent tax offset (12.5 per cent from September 2001 to July 2007); it is the production expenditure incurred in making a film that is reasonably attributable to:
– goods and services provided in Australia
– the use of land provided in Australia, or
– the use of goods that are located in Australia at the time they are used in the making of the film.
2. This amount represents the maximum possible benefit. That is, it does not take into account the companies’ tax liabilities which the offset amount is first applied against.