Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I will begin by briefly explaining why this does not represent a change of policy by the Government in this area. Section 32 amends the definition of "eligible expenditure" in section 481 to confirm the current practice that payments made directly by a qualifying company, in respect of the provision of labour-only services by an individual, for the purposes of the production of a qualifying film qualify as eligible expenditure. Eligible expenditure is the portion of the total cost of production of a qualifying film that is expended on the production of the film in the State.

Deputies may recall that in the Finance Act 2018, the film tax credit was moved to a self-assessment basis. This involved the introduction of a substantial body of new legislation to govern matters previously dealt with by regulation. It was subsequently discovered that the new legislation unintentionally created a discrepancy between the definition of eligible expenditure and the long-standing practice in the industry. Payments in respect of self-employed individuals providing a labour-only service had always been treated as qualifying for section 481 relief and this treatment was expressly stated in previous Revenue guidance. This amendment confirms that the meaning of "eligible expenditure" includes labour-only services as described, and in addition to expenditure incurred directly by the qualifying company in the employment of eligible individuals on the production of the film and expenditure incurred directly or indirectly by the qualifying company in the provision of certain goods, services and facilities by a person who is carrying out their business from a fixed base of business in Ireland. This recognises that self-employed services may be provided in the sector but it is not intended to create a bias either towards or for self-employment. The characterisation of a worker as employed or self-employed will continue to be governed by the code of practice on employment status having regard to the specific circumstances of each individual case.

This change does not change our policy. It is policy-neutral towards the question of self-employment. It does not change the policy with regard to that. To be clear, if it subsequently comes to light that we have done anything here that changes the balance in any direction, we will look at it again but it is not our intention to do so. We are simply putting on a statutory footing the guidance that currently exists.