Pearse Doherty (Donegal South West, Sinn Fein)
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318. To ask the Minister for Finance further to Parliamentary Question No. 229 of 15 July 2014 the way in which the new corporation tax relief scheme for films will operate; and the financial implications for the Exchequer. [34642/14]

Michael Noonan (Limerick City, Fine Gael)
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The revised scheme for Film Relief will operate through a payable Corporation Tax credit to Producer Companies in the amount of 32% of eligible expenditure incurred in the production of a qualifying film or television programme. Eligible expenditure is expenditure incurred on the employment of individuals, in so far as such employment is exercised within the State, and on the acquisition of goods and services provided within the State. Qualifying productions must meet conditions set both by the Revenue Commissioners with regard to the financial structure of the production and by the Minister for Arts, Heritage and the Gaeltacht with respect to the cultural merit of the production and the generation of employment.

The new scheme will replace the current scheme which provides relief to investors in qualifying productions at the income tax rate of 41%. Due to the manner in which the current scheme is operated only an estimated 28% of the qualifying expenditure amount actually accrues to the benefit of the qualifying production. As the full 32% relief under the new scheme is payable directly to the film producer company the new scheme will deliver a greater benefit to the film industry while reducing the cost to the Exchequer.  

Preliminary analysis of film relief during 2013 indicates that the cost to the Exchequer for 2013 of the current scheme will be in the region of €76m. A similar level of qualifying activity under the new scheme would result in a lower annual cost to the Exchequer down from €76m to €59m together with an increase from €52m to €59m in benefit received by the film industry.