Michael Healy-Rae (Kerry, Independent)
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190. To ask the Minister for Finance if the 5% tax credit (details supplied) will be retained; and if he will make a statement on the matter. [42001/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 481 TCA 1997 provides a 32% payable credit for eligible expenditure on film production in Ireland. It is available to Irish and international film production companies that are resident in the State or in an EEA State and carry on business in the State through a branch or subsidiary. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture.

Finance Act 2018 introduced a short-term, tapered regional uplift. The purpose of the regional uplift is to support the development of new, local pools of talent in areas outside the current main production hubs, to support the geographic spread of the audio-visual sector. The regional availability of the uplift is limited to areas in Ireland sanctioned to receive regional aid under the EU regional aid guidelines.

When introduced in Finance Act 2018 the regional uplift was to be phased out on a tiered basis with 5% available in years 1 and 2 (2019 & 2020), 3% available in year 3 (2021), 2% available in year 4 (2022), and 0% available from year 5 on. However, the COVID-19 crisis had a detrimental impact on the audiovisual sector, with the majority of production companies having to suspend activity for a significant portion of 2020 and, as a result, much of the intended incentive effect of the regional uplift in 2020 was lost. Therefore Finance Bill 2020 amended the regional uplift to provide for an additional 5% year in 2021, in effect to replace the incentive year lost as a result of the Covid-related public health measures.  The tapered withdrawal of the uplift then restarts, reducing to 3% in 2022, 2% in 2023, and Nil thereafter.

My officials examine a range of possible measures in advance of the Finance Act each year, including potential amendments to Section 481 Film Relief, and the Deputy's proposal will be considered as part of this process. In this regard it should be noted that film relief is an approved State aid and any amendments to the scheme would require consideration of State aid constraints and approval from the European Commission.