What is the Producer Tax Offset? A guide for new producers
If you’re planning a future in Australian film and television production, then you’ll need to get to know the Producer Tax Offset.
The Producer Tax Offset – or just the Producer Offset – is a refundable tax offset for money spent in Australia or by Australian companies to make Australian films. Usually, if you claim a tax offset, the amount of tax you pay (when you do your tax return) is reduced. Because this is a refundable tax offset, you can actually generate a tax refund where no tax has been paid.
It’s underpinned by income tax legislation, and seen as a source of funds for eligible projects. That’s exactly why it’s not something that you only think about at the end of your production.
Producers or production companies may use the Producer Offset upfront, to secure funding. You can ‘cashflow’ your Producer Offset, or borrow against the potential future offset at the early stages of a project (for more read: Common production funding options – and the traps to look out for).
What is it worth?
The Producer Offset you receive is based on you Qualifying Australian Production Expenditure or QAPE. You are eligible for:
- 40% of the company’s total QAPE on a feature film
- 20% of the company’s total QAPE on a film that is not a feature film
In effect, QAPE is the money spent in Australia on the production. Screen Australia provide an A-Z budget, which is a good starter list if you want to understand the types of things that can be included in your QAPE. Overall, it includes,
- Goods and services provided in Australia
- The use of locations in Australia, and
- The use of goods that are located in Australia at the time they are used in the making of the project
There is a threshold, or minimum QAPE required to be eligible for the Producer Offset, which changes depending on the format of your production. You can find the list on the Screen Australia website.
Where do I get more info?
We’ve also developed a full run-down of how you can apply for the Producer Tax Offset. If you are considering accessing the Producer Tax Offset, then it is best to get your records in order early. So we have also created a series on how to manage the money side of your production at each stage of the process.
Of course, if you are considering claiming the Producer Offset for a current or upcoming production, please get in touch. We can support and advise you no matter what stage of production you are in.
In 2021, the Australian Government is modernising screen production incentives and injecting new funding to support the creation of film and television. These changes take place from 1 July 2021.
Read the full factsheet from the Australian Government with the changes here.
If you would like a hand to apply for the Producer Tax Offset, this is one of our specialises. Feel free to get in touch with us for a free consult.
A note on this article
Information provided by the Above the Line Accounting on this website is general in nature and does not take into consideration your personal financial situation. It is for educational purposes only and does not constitute formal financial advice.