In Australia: State Based Incentives and Rebates
Australian Film Commission)
State Based Incentives and Rebates
states offer support and financial assistance in addition
to the various federal rebates and incentives. The
assistance comes in the form of payroll tax rebates
or exemptions, cast and crew wage rebates, location
attraction cash grants and the provision of free or
subsidised public service resources. The range of
assistance and qualification criteria varies from
state to state and more complete details on the incentives
may be obtained from each of the state film offices.
and Other Obligations in Australia
And Services Tax (GST)
The GST is a 10 per cent tax on most goods, services
and rights connected with Australia. Much like VAT
it is designed as a tax on the private end user or
consumer and not as a tax to be imposed on businesses.
entity can register and claim back the GST paid by
it on the acquisitions it makes in connection with
their business activities. Nearly all the costs incurred
by a film production will have a GST component (wages
and salaries of employees do not attract the GST).
is recommended that an offshore producer planning
to undertake production activity in Australia, ensure
that the appropriate structure is in place to enable
it to reclaim this tax. Unlike the VAT, monthly claims
can be made to minimise the cashflow exposure within
the production cycle to virtually nil, as the Australian
Tax Office undertakes to refund net GST paid within
14 days of lodging its Business Activity Statement
if undertaking production in Australia, either one
of the following scenarios will ensure that the GST
rebate on the production expenses can be refunded:
the offshore producer engages an established
Australian production services/facilitation company
which will incur all the expenses of production and
claim back the GST on those expenses; or
the offshore producer establishes their own
Australian company through which all production expenses
will be incurred, obtains an Australian Business Number
(ABN) and registration for GST in order to claim the
option is chosen the funds received by the Australian
company from the offshore entity will be considered
payment for some combination of goods, services and/or
rights. These transactions can be GST free with consideration
of the following:
if it is services, an issue to be considered
is whether the off-shore producer will be present
or represented in Australia during production which
may cause transaction to lose its GST free status;
if rights are being provided solely for use
outside Australia the transaction may be GST free.
If the rights are for worldwide usage including Australia
the Australian company supplying the rights may have
to charge the non-resident GST on part of this transaction;
if it is goods there is a requirement that
they are exported within 60 days of payment.
non-resident can claim back any GST charged by registering.
If it is found to be necessary for the offshore company
to register for GST, the Australian company can act
as its agent for GST purposes to fulfil its obligations
with little difficulty to either party.
is important that a contract is prepared to cover
the transactions that will take place so that GST
does not become a cost for the production and define
the relationship between the offshore producer and
the Australian company.
Transfer Pricing Note
If an offshore entity establishes its own Australian
subsidiary company to produce the project, regulations
require that there is a fee charged for the services
and/or rights provided of an equitable market value.
This should be contained in the production contract
between the two entities. The subsidiary will be taxed
at the flat corporate rate of 30 per cent on its taxable
income. The Australian company will also usually require
at least one Australian resident to be appointed as
a company director. Non residents can also be appointed
as directors of the company.
If an offshore entity establishes its own subsidiary
company there may be a statutory audit requirement.
This can be avoided if recognised sufficiently early
in the process and an application is made to waive
Foreign Cast And Crew To Work In Australia
Australia has entered into international taxation
agreements with a number of countries around the world
that prescribe the appropriate treatment applicable
for foreign personnel working in Australia on productions.
Income derived by entertainers (i.e. on screen performers)
for services performed in Australia will be subject
to income tax in Australia, regardless of the contracting
entity and the length of stay. Under some agreements
income tax is paid in Australia only if the value
of these services in Australia reaches a certain level
i.e. US$10,000 in the agreement with the USA.
engaged through a loan-out corporation will pay tax
at the flat rate of 30 per cent. Non-resident individuals
will be taxed at the graduated rates in the table
order to minimise this tax exposure for a productions
cast members, it is important to discuss a reasonable
bifurcation of the contract at an early stage of the
negotiation process to allocate the appropriate value
to the services performed in Australia. However, the
impact of bifurcation on Qualifying Australian Expenditure
(QAE) for the purpose of the 12.5 per cent refundable
tax offset may need to be considered if applicable.
is also recommended that the actor be advised to engage
a local tax accountant to lodge their Australian tax
return so that the available deductions can be optimised.
In most of the international agreements, income derived
in Australia by foreign off-screen crew employed as
independent professional contractors, will face no
income tax liabilities in Australia provided they
do not have a fixed base or permanent establishment
available to them in Australia and they do not spend
more than 183 days present in Australia in the financial
either of the above conditions are not satisfied,
the contractor may be subject to income tax in Australia.
Individual Tax Rates (AUD)
Income Gross Tax Payable
0-$20,000 - 29%
$20,001$50,000 - $5,800 + 30% of excess over
$50,001$60,000 - $14,800 + 42% of excess over
$60,001 and over - $19,000 + 47% of excess over $60,000
Requirements For Cast And Crew
Cast and Crew performing services in Australia as
an independent professional contractor or via their
loan-out corporation may have GST obligations, however
it can usually be arranged in their contracts for
the Australian production company to take care of
these requirements on their behalf.
Responsibilities For Australian Employees
In Australia there are responsibilities to withhold
tax, pay superannuation (pension contribution), payroll
tax and workers compensation (insurances) on any Australian
crew and cast employed by the production. Some of
these elements vary by state. It is important to allow
for these fringes in your budgets and to fulfil the
liabilities when in production. These liabilities
are accomplished most easily through an Australian
entity, service or payroll company.
Movie Makers Market (Media Man Australia is a
In Australia: Federal Incentives, by Jane Corden
production boon - 13th May 2004
makers and movie stars - What makes a star?
Bradley - Richard Bradley Productions
and Investment Guide