12.5% tax abatement approved for big pix
SYDNEY — The Australian government has delivered on its promise to implement a 12.5% tax rebate for big-budget film and TV productions lensed Down Under.
The federal parliament passed legislation Thursday, backdating it to Sept. 4, when the government announced the concession. That means the two “Matrix” sequels shooting in Sydney will be eligible.
The measure “will provide a real incentive to the producers of big-budget feature films to locate in Australia,” said Minister for Communications and the Arts Richard Alston and assistant treasurer Helen Coonan in a statement.
The government offered the carrot to quell fears that U.S. studios and other offshore producers would bypass Oz after the Australian Tax Office denied tax breaks to local investors in “Moulin Rouge” and “Red Planet.”
To qualify, producers must spend a minimum of $A15 million ($7.8 million) in this country. In all cases where the production outlay here is under $26 million, that coin must rep at least 70% of the total budget. The 70% rule does not apply to any film that shells out more than $26 million in Oz.
Average rebate 10%
The government expects the average rebate will work out to 10% of a film’s total production outlay, varying according to the level of Australian spending.
“We’re thrilled the legislation has been passed and we intend to take full advantage of it,” said Trisha Rothkrans, CEO of Ausfilm, the production industry’s export promotion group.
The Communications and Arts Dept. consulted widely with the industry in drawing up the bill, and Rothkrans describes it as a “very workable piece of legislation.”
Ausfilm and facilities such as film lab Atlab are hopeful the rebate will encourage more offshore producers to do post in Oz instead of completing films back home, which will help those producers qualify for the incentive or increase the size of their rebate.
Execs at the Fox Studios in Sydney — home of “Matrix” — say the promise of the rebate has already been a factor in luring U.S. producers Down Under.
The government said it will review the concession in September 2006.