Wednesday, February 8, 2012

Finance Act - Section 481

Some changes to the operation of Section 481 are buried in today's Finance Act - looks like a fair bit of tightening up on reporting and compliance. I wonder what triggered the Revenue's concern?

23.—The Principal Act is amended in section 481—
(a) in subsection (1) by inserting the following definition after the definition of ‘‘authorised officer’’: ‘‘ ‘director’ shall be construed in accordance with section 433(4);’’,
(b) in subsection (1), in the definition of ‘‘relevant investment’’, by substituting ‘‘qualifying company,’’ for ‘‘qualifying company.’’,
(c) in subsection (1) by inserting the following definition after the definition of ‘‘relevant investment’’: ‘‘ ‘specified relevant person’ means any director or secretary of the qualifying company.’’,
(d) in subsection (2A)(g)(v) by substituting ‘‘subsection (2CA)’’ for ‘‘subsection (2C)(ba)’’,
(e) in subsection (2C)(b) by substituting ‘‘subject to subsection (2CA),’’ for ‘‘subject to paragraph (ba),’’,
(f) in subsection (2C) by deleting paragraph (ba),
(g) in subsection (2C) by deleting ‘‘and’’ before paragraph (d),
(h) in subsection (2C)(d) by substituting ‘‘fulfilled,’’ for ‘‘fulfilled.’’,
(i) in subsection (2C) by inserting the following after paragraph (d): ‘‘and (e) if any sum representing— (i) a repayment of a relevant investment, or (ii) an amount in connection with a relevant investment, out of the proceeds of exploiting the film — is paid to an allowable investor company or qualifying individual, as the case may be, before the Revenue Commissioners have notified the company in writing that a compliance report, as referred to in paragraph (d)(iii), has been received by them.’’,
(j) by inserting the following after subsection (2C): ‘‘(2CA) (a) Paragraph (b) of subsection (2C) shall not apply to financial arrangements in relation to a transaction, or series of transactions, where such arrangements have been approved by the Revenue Commissioners. (b) The Revenue Commissioners shall not approve financial arrangements, to which paragraph (b) of subsection (2C) would, but for this subsection, apply unless: (i) the arrangements relate to either or both—(I) an investment made in a qualifying film, and (II) the filming of part of a film in a territory other than a territory 5 referred to in clause (I) or (II) of subsection (2C)(b)(i), (ii) a request for approval is made by the qualifying company to the Revenue Commissioners before such arrangements are effected, (iii) the qualifying company demonstrates to the satisfaction of the Revenue Commissioners that it can provide, if requested, sufficient 15 records to enable the Revenue Commissioners to verify—(I) in the case of an investment, the amount of the investment made in the qualifying company and the person who made the investment, and (II) in the case of filming in a territory,the amount of each item of expenditure on the production of the qualifying film expended in the territory, whether expended by the qualifying company or by any other person, and (iv) they are satisfied that it is appropriate to grant such approval. (c) In considering whether to grant an approval under this subsection in relation to financial arrangements, the Revenue Commissioners may seek any information they consider appropriate in relation to the arrangements or in relation to any person who is, directly or indirectly, a party to the arrangements. (d) Where the Revenue Commissioners have approved financial arrangements in accordance with this subsection, no amount of money expended, either directly or indirectly, as part of the arrangements may be regarded, for the purposes of subsection (2A)(g)(iv), as an amount of money expended on either the employment of eligible individuals or on the provision of goods, services and facilities as referred to in that subsection.’’,
(k) in subsection (2E)(m) by substituting ‘‘subsection (2CA)’’ for ‘‘subsection (2C)(ba)’’, and (l) by inserting the following after subsection (2E): ‘‘(2F) Where a qualifying company fails to provide to the Revenue Commissioners a compliance report as 5 referred to in subsection (2C)(d)(iii), within the time provided for in regulations made under subsection (2E)(h), the specified relevant person shall provide such compliance report to the Revenue Commissioners within 2 months after that time.’’.

2 comments:

Anonymous said...

The Rumours on the street are this is a direct result of a group called the Irish Film Workers Forum who have been set up in order to lobby the Government for a greater form of compliance and transparency in the industry. From what I gather their mission is to highlight abuses in the industry and wrestle it from the cozy few who have used it for their own gain and thereby make a sustainable film industry in Ireland.

irish film portal said...

My own recent experience has been an invitation from the Revenue to take the FoI route in order to obtain information that should, in my opinion, be readily and speedily available at all times.

If information on every S481 project is not available then neither the Revenue or the people who worked on each project will be in a position to challenge the producers on any inaccuracies in reported Irish spend.

I have it on good authority that there are ongong issues with S481 that are threatening to bring the industry into disrepute. The lack of transparency is a chancers' charter and the fear of black-listing is preventing people from speaking out.