• Search Keywords

  • Year

  • Production Status

  • Genre

  • Co-production

  • SA Supported

  • First Nations Creative

  • Length

  • Technique

Qualifying expenditure

There are two general expenditure concepts relevant to the Producer Offset, which are outlined below:

  • production expenditure, and
  • qualifying Australian production expenditure (QAPE).

Production expenditure

A project’s ‘production expenditure’ is defined in section 376-125(1) of the Income Tax Assessment Act 1997 (ITAA) as the expenditure incurred by the applicant company in, or that is reasonably attributable to, the ‘making of the film’ (ie the project).

The making of the film means doing the things necessary for the production of the first copy of the project. This includes development, pre-production, principal photography and post-production activities and any other activities that are necessary to bring a production up to the state where it is ready to be distributed, broadcast or exhibited to the general public.

The making of the film does not include any aspect of financing the project, developing the proposal for the project (eg pitching), distribution, marketing or promotion of the project.

An applicant company may incur production expenditure and QAPE in the financial year for which the Producer Offset is sought or in earlier financial years. Expenditure incurred prior to 1 July 2007, or incurred in a subsequent financial year to that of completion of the project, cannot be production expenditure or QAPE.


QAPE is a subset of production expenditure. It has a dual role for the purposes of the Producer Offset:

  • It is the basis for determining whether the minimum expenditure thresholds have been met (see Format), and
  • It provides the basis of the Producer Offset itself, as the amount of the refund is a fixed percentage (30% or 40%) of QAPE on a certified project.

QAPE is defined by section 376-145 of the ITAA as the company’s production expenditure that is incurred for, or is reasonably attributable to:

  • goods and services provided in Australia
  • the use of land located in Australia
  • the use of goods that are located in Australia at the time they are used in the making of the project.

You should note that because QAPE is for services provided in Australia, where a company contracts an Australian firm to provide production services and that firm subcontracts to a non-Australian firm or undertakes some of the service outside of Australia, the proportion of the expenditure that is undertaken outside Australia is non-QAPE.

Note that if QAPE is incurred under an arrangement or transaction that is not at ‘arm’s length’, we are required under the ITAA to determine the QAPE attributable to that arrangement or transaction to be the arm’s length amount – see the Producer Offset Guidelines March 2022.