The Australian Government has decided to alter its interpretation of the relevant taxation legislation to allow television series and mini-series which are produced for streaming to the public on online platforms to qualify for the Location Offset and the Post, Digital and Visual Effects (PDV) Offset. The decision applies to applications for those Offsets received from 11 April 2019.
There are three principal Australian Government incentives which support screen production in Australia:
- the Producer Offset
- the Location Offset
- the PDV Offset.
Each of the three Offsets is a refundable tax offset which entitles an eligible applicant to receive a tax refund where the amount of the Offset claimed exceeds the applicant’s tax liabilities. A project is only entitled to one of the Offsets – they cannot be combined.
Due to a minor difference in the drafting of the relevant provisions of Australian tax legislation, the Producer Offset has been available for series produced for streaming to the public on online platforms such as Netflix and Stan, but the Location Offset and PDV Offset have not been available for those series. This is because the provisions in the legislation applicable to the Producer Offset refer only to “series” whereas the provisions applicable to the Location Offset and the PDV Offset refer to “television series” and “mini-series of television drama”.
Prior to the decision announced on 11 April 2019, the Department of Communications and the Arts, which administers the Location Offset and the PDV Offset, had interpreted the word “television” as meaning only free-to-air and pay or subscription television, meaning that series produced for online streaming were ineligible for those Offsets.
This issue has been of considerable concern to the Australian screen production industry and screen agencies for some time, and submissions and representations have been made to the Department requesting an interpretation of the word “television” which reflects the breadth of the term and modern reality. Holding Redlich has been involved in those submissions and representations and we consider the change which the Government has announced to be necessary, fair and in accordance with the correct interpretation of the legislation.
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