Australia: Consultation on proposed changes to “producer and location tax offset”

Treasury released for consultation exposure draft legislation [PDF 245 KB] that introduces changes to the “producer tax offset” and the “location tax offset.”

According to Treasury, the changes are part of the federal government’s commitment in the 2023-2024 budget and 2023-2024 mid-year economic and fiscal outlook to support the Australian screen industry.

The draft producer tax offset law [PDF 136 KB] seeks to amend the Income Tax Assessment Act 1997 (ITAA 1997) to allow a film production company to qualify for the producer tax offset by spending a minimum of $35 million* of qualifying Australian production expenditure for a season of a drama series, over a maximum period of 12 months of production or 36 months for an animated image film series.

The draft location tax offset law [PDF 199 KB] seeks to amend the ITAA 1997 to:

• Increase the rate of the location tax offset to 30%
• Increase the minimum qualifying Australian production expenditure required to $20 million and the per hours threshold to $1.5 million
• Include a minimum training expenditure test or alternatively a requirement to establish or upgrade certain permanent Australian film infrastructure or satisfy certain training program requirement for individuals working on the film
• Require some post, digital and visual effects for productions to be provided by Australian providers or through an Australian permanent establishment
• Enable the Arts Minister to request information by written notice in a specified period for the location tax offset

The consultation closes on 16 February 2024.

*$=Australian dollar