Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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80. To ask the Minister for Finance if film producers who apply for and receive section 481 tax relief are responsible to ensure that the requirement to provide quality employment and training is met and have legal responsibility for employees and trainees on film productions funded by section 481 and that those legal responsibilities carry over from production to production in cases in which the same producer is involved; his views on whether the resulting number of jobs being created in the film industry is a small fraction of the number previously claimed by industry representatives in testimony and submissions to the Houses of the Oireachtas in view of the annual tax expenditure of €70 to €80 million on section 481; and if he will make a statement on the matter. [17825/19]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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89. To ask the Minister for Finance the penalties which will be imposed on film producers in receipt of section 481 tax relief that are found to have breached the legal rights of workers; if these will include withdrawal of the tax relief and other public funding; and if he will make a statement on the matter. [16759/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 80 and 89 together.

The Deputy will be aware that a number of amendments were made to Section 481 of the Taxes Consolidation Act 1997 as part of Finance Act 2018. I would like to advise the Deputy that I signed the regulations and commencement order that give effect to the 2018 changes on the 27th of March.

One of the most significant changes I made relates to the potential for inflated claims. Production companies are now required to apply for payment of the tax credit under the self-assessment system.  This brings the operation of the credit within the normal penalty and prosecution provisions for incorrect claims.

In relation to training, I legislated to split the certification process between Revenue and the Department of Culture, Heritage and the Gaeltacht (DCHG). Production companies are now required to apply to the DCHG before commencement of main production to have the film certified as a qualifying film. This provides an opportunity for earlier engagement on the training requirements associated with the credit and the quality of training intended to be provided.

Applicants must now provide a skills development plan if the amount to be spent on making the film in Ireland is over €2m, that plan must be agreed with Screen Ireland.  There must be a skills development participant for every €177,500 of tax credit claimed, up to a maximum of 8 such participants.  A post project skills development report is required for each project.

In relation to quality employment, as I have previously stated, the monitoring of compliance with employment rights legislation is primarily a matter for the Department of Business, Enterprise and Innovation through the Workplace Relations Commission, which falls within that Department’s remit.  However, as part of the new certification process to be undertaken by DCHG, an applicant company is required to sign an undertaking of compliance with all relevant employment legislation. This undertaking is required to be signed and furnished with every section 481 application.

If a producer does not comply with the employment and skills development requirements set out by the Minister for Culture, Heritage and the Gaeltacht, including compliance with the undertaking, they are not eligible for the corporation tax credit.  Any amount already claimed will be recoverable, with interest.  As the claim for tax relief is made by the producer on a self assessment basis, in each case consideration would have to be given to Revenue’s Code of Practice for Revenue Audit and other Compliance Interventions to determine whether or not penalties and publication may arise. 

In relation to numbers employed within the Industry, the Revenue Commissioners, from section 481 applications in 2016, estimate the number of employees directly engaged in Section 481 productions to be 2,158 (full time equivalents).  My Department in carrying out the Section 481 cost benefit analysis in 2018 estimated that there were a further 902 indirect employments giving a total of 3,060 full time equivalents associated with Section 481 projects in that year.  It must be emphasised that these figures relate specifically to projects in receipt of the section 481 tax credit, whereas some other figures quoted refer to the wider audio-visual and radio sector.