GLOBAL TELEVISION PRODUCTION AND CO-PRODUCTION INCENTIVES

Transcription

1 GLOBAL TELEVISION PRODUCTION AND CO-PRODUCTION INCENTIVES With an increasing number of television incentives available worldwide, structuring international productions has become ever more complex. To help navigate the landscape this note summarises some of the main incentives on offer across the globe as well as the key co-production treaties currently in place. INCENTIVES AVAILABLE FOR TELEVISION PRODUCTION Jurisdiction Maximum Incentive Main Eligibility Criteria Main Co-Production Abu Dhabi Australia 30% of Abu Dhabi qualifying production expenditure ("ADQE") up to a maximum of US$1m Location Offset: 16.5% of qualifying Australian production expenditure ("QAPE") PDV Offset: 30% of qualifying post, digital and visual effects production expenditure ("PDVE") Minimum spend requirement of $50,000 ADQE for television productions and series and $25,000 ADQE for commercials and music videos Applicant must hold a valid Media Zone Authority Abu Dhabi trade licence Production must be intended for commercial distribution and be approved by The National Media Council Excluded content includes news and current affairs, sports and fund raising programming Production requires an average minimum spend of A$1m QAPE per hour of programming Eligible formats includes documentary, reality and animation programming Minimum spend requirement of A$500,000 PDVE Eligible formats includes documentary, reality, animation and live action programming None Canada, Germany, Ireland, Israel, Italy, South Africa, Singapore and the United Kingdom MOUs with France and New Zealand Agreement reached with Korea - not yet in force Negotiating treaties with India, Denmark and Malaysia

2 Australia Cont d Producer Offset: 20% of QAPE Location Incentive: 13.5% of QAPE Production must demonstrate significant Australian content or be an official coproduction and meet certain requirements for commercial distribution Minimum total production spend requirement of between A$250,000 and A$1m depending on the category of programming Production must meet certain minimum format lengths and eligible content includes drama and documentary programming and short film animation Minimum spend requirement of A$30m QAPE and at least A$1m of QAPE per hour of programming Excluded content includes commercials, one-off documentaries, quiz and panel shows and training programming Canada For each of the above, the applicant must be either an Australian resident company or a foreign resident company with a permanent establishment in Australia Production Tax Credit: 25% of qualifying labour expenditure which must not exceed 60% of the cost of production, up to a maximum of 15% of the total budget The production company must: (i) be primarily a film or video production business and a Canadian taxable corporation; (ii) exclusively own the worldwide copyright and control the initial worldwide exploitation rights of the production; and (iii) retain an acceptable share of revenues from non-canadian markets All producer-related personnel must be Canadian At least 75% of production and post-production costs must be payable to Canadians or incurred in Canada respectively Excluded genres include news and current affairs, talk shows, game shows, award shows, corporate films, commercials, pornography and sports, fund raising and reality programming Confirmation from a Canadian distributor or appropriately licensed broadcaster that the production will be shown in Canada within two years of completion Over 50 countries, including Australia, Czech Republic, France, Germany, Hungary, India, Ireland, Italy, New Zealand, Singapore, South Africa and the United Kingdom 02 Global Television Production

3 Canada Cont'd Production Services Tax Credit: 16% of the qualifying labour expenditure incurred in respect of an accredited production Czech Republic 20% of expenditure on goods and services incurred in the Czech Republic and a further 10% on qualifying international spend. Eligible spend is capped at 80% of the total budget France Hungary 20% of qualifying local spend up to a maximum of 10m 20%* of qualifying production spend (foreign spend is capped at 25% of the eligible Hungarian spend) The applicant must: (i) be primarily a film or video production business; (ii) exclusively own the worldwide copyright or contract directly with the copyright owner; and (iii) be a taxable Canadian corporation or a foreign-owned corporation with a permanent establishment in Canada Excluded genres include news and current affairs, talk shows, game shows, award shows, corporate films, commercials, pornography and sports, fund raising and reality programming Minimum total budget requirement of CA$100,000 for episodes of 30 minutes or less and CA$200,000 for all other episodes Production must pass a European cultural test Minimum spend requirement of CZK10m per episode Minimum runtime of at least 40 minutes per episode The applicant must pay income tax in the Czech Republic The applicant must be the production services company and be subject to corporate income tax in France Production must be an eligible production and pass a cultural test Excluded content includes commercials, corporate films, documentaries and programming that is pornographic in nature or promotes violence Minimum spend requirement of 1m Production must be a documentary, series or animation made for distribution and must pass a cultural test Excluded content includes pornography, extreme violence, commercials, reality and soap opera programming Applicant must be a Hungarian company and registered with the National Film Office ("NFO") 30 days before the start date of filming, the production must be reported to the NFO *This is expected to be increased to 25% shortly with retrospective effect as of 24 June Canada, France and Italy Around 50 countries, including Australia, Canada, Czech Republic, Germany, Hungary, Italy and New Zealand Canada, France, Germany and Italy 03

4 Ireland New Zealand 28%* of eligible Irish expenditure up to a maximum of 50m qualifying expenditure Production must pass a cultural test Eligible formats are drama, animation and creative documentary programming Applicant must be an Irish resident producer *This is set to increase to 32% in 2015 and, bringing the Irish incentive in line with the UK tax credit, it will be extended to include talent from outside the EU International Productions 20% of qualifying New Zealand production expenditure ("QNZPE") An additional 5% is available to those who meet the requirements of a significant economic benefits test New Zealand Productions 40% of QNZPE up to a maximum of NZ$15million (i.e. a grant of NZ$6 million) Productions with QNZPE over NZ$15million ("Additional QNZPE") may apply for a 40% grant on the Additional QNZPE, capped at NZ$14million, subject to meeting certain additional criteria Minimum spend requirement of NZ$4m QNZPE Productions seeking a grant for Post, Digital and Visual Effects only require QNZPE of at least NZ$1m Eligible formats include scripted and unscripted drama, documentary, factual, reality, children's shows and animation Excluded genres include commercials, news, panel shows, training programmes, sports and pornography Applicant must be responsible for the production of the film and be an SPV resident in New Zealand or have a permanent establishment in New Zealand Minimum spend requirements QNZPE: Single episode (scripted) - NZ$1m total and no less than NZ$800,000 per hour Single episode (unscripted) - NZ$250,000 total Series (scripted) - NZ$1m total and no less than NZ$500,000 per hour Series (unscripted) - NZ$250,000 per hour Short form animation - NZ$250,000 total and no less than NZ$400,000 per hour Film must demonstrate significant New Zealand content or be an official co-production and must meet certain requirements for commercial exhibition Applicant must be a New Zealand resident company One of the provisos of being awarded the grant in respect of Additional QNZPE is that a share of the income for the film must be paid to the New Zealand Film Council for it to reinvest in the film industry Australia, Canada, Luxembourg, New Zealand and South Africa Australia, Canada, China, Denmark, France, Germany, India, Ireland, Italy, Republic of Korea, Singapore, Spain, South Africa, Chinese Taipei and the United Kingdom Negotiating treaties with Brazil, Poland and Israel 04 Global Television Production

5 Singapore 40% of total Singaporean expenditure ("SE") (an additional 10% of SE can be claimed for use by the applicant for its next eligible project) Applicant must be a Singapore registered media company Eligible formats include television programming and animation Proposed financing plan and cashflow for the project must be evidenced Australia, Canada and Korea South Africa Foreign Production and Post-production Incentive: Production alone 20% of qualifying South African expenditure ("QSAE") Production and postproduction or postproduction alone between 22.5% and 25% of QSAE Minimum spend requirement of QSAE of R12m for production expenditure At least 50% of principal photography to be filmed in South Africa for at least four weeks Minimum spend requirement of QSAE of R1.5m for post-production expenditure 100% of the post-production to be carried out in South Africa for at least two weeks Eligible formats are drama series, documentary and animation programming Australia, Canada, France, Ireland, Italy, New Zealand and Germany Applicant must be an SPV incorporated in South Africa Local Production and Co-Production Incentive: Applicant must be an SPV incorporated in South Africa with a majority of South African shareholders 35% of the first R6m of QSAE and 25% of QSAE thereafter Must be a qualifying South African project and have a minimum budget of R2.5m Eligible formats are drama series, documentary and animation programming Spain The latest draft Spanish Corporate Tax Law sets a tax deduction of 20% for the first 1 million and 18% thereafter for domestic audio visual series, and 15% of qualifying Spanish expenditure for foreign productions up to maximum of 3 million Must be a qualifying Spanish production At least 50% of the deductible base shall be the expenditure incurred in Spain For foreign productions, expenditures directly related to the production of at least 1 million incurred in Spain Eligible formats are drama, animation and documentary Argentina, Brazil, Canada, Chile, Cuba, Morocco, Mexico, New Zealand, Puerto Rico, Russia, Tunisia and Venezuela 05

6 United Kingdom 25% of qualifying UK expenditure ("QUKE"), up to a maximum of 80% of total core expenditure Production must pass a cultural test or be an official co-production Production must be intended for broadcast, including the internet Minimum spend requirement of 25% QUKE Eligible formats are drama, comedy, documentary and animation programming For drama, comedy and documentary projects, the production requires an average minimum spend of 1m of QUKE per hour of programming For animation projects, at least 51% of the total core expenditure must be spent on animation Production company must be a UK company for tax purposes Australia, Canada, Israel, New Zealand and Occupied Palestinian Territories Agreement reached with Brazil - not yet in force 06 Global Television Production

7 HOW WE CAN HELP DLA Piper's leading media finance practice and global network of offices means we are uniquely placed to assist with the structuring of international television productions. The practice is made up of more than 50 specialist lawyers including 15 partners worldwide. Our international reach enables us to offer multi-jurisdictional advice to major studios, television production companies and financiers when structuring projects from multi-million dollar productions to more modest independent programming. We regularly work with our clients to explore options in different territories with a view to maximising the incentives available. These complex structures often involve a combination of government subsidies and tax credits, tax based finance, distribution pre-sales and banking finance. We also pride ourselves on being able to source finance for production incentives through our global client relations. If you would like to learn more, please do get in touch. 07

8 AUSTRALIA CHINA Judith Miller T judith.miller@dlapiper.com Richard Wageman T richard.wageman@dlapiper.com CZECH REPUBLIC DOHA Jan Rataj Senior Associate T jan.rataj@dlapiper.com Mel Sims T mel.sims@dlapiper.com DUBAI FRANCE Paul Allen T paul.allen@dlapiper.com Gregory Tulquois T gregory.tulquois@dlapiper.com GERMANY HONG KONG Kai Tumbragel T kai.tumbragel@dlapiper.com Edward Chatterton Foreign Legal Consultant T edward.chatterton@dlapiper.com HUNGARY ITALY Monika Horvath T monica.horvath@dlapiper.com Giangiacomo Olivi T giangiacomo.olivi@dlapiper.com 08 Global Television Production

9 NETHERLANDS RUSSIA Richard van Schaik T richard.vanschaik@dlapiper.com Anna Otkina T anna.otkina@dlapiper.com SINGAPORE SOUTH AFRICA Timothy Tan T / timothy.tan@dlapiper.com Emma Kingdon Consultant T emma.kingdon@dlacdh.com SPAIN SWEDEN Diego Ramos T diego.ramos@dlapiper.com Mathias Berggren T mathias.berggren@dlanordic.se UK UK Christopher Hanson T chris.hanson@dlapiper.com Lee McGuirk T lee.mcguirk@dlapiper.com UK Michael Ridley T michael.ridley@dlapiper.com This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper UK LLP and DLA Piper SCOTLAND LLP will accept no responsibility for any actions taken or not taken on the basis of this publication. If you would like further advice, please speak to your DLA Piper contact on DLA Piper UK LLP is authorised and regulated by the Solicitors Regulation Authority. DLA Piper SCOTLAND LLP is regulated by the Law Society of Scotland. Both are part of DLA Piper, a global law firm operating through various separate and distinct legal entities. For further information please refer to UK switchboard: +44 (0) Copyright 2013 DLA Piper. All rights reserved. MAY 14 Ref: LDSDP/