Commonwealth of Australia Explanatory Memoranda

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TAX LAWS AMENDMENT (2007 MEASURES NO. 5) BILL 2007

                     2004-2005-2006-2007



THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                           SENATE




 TAX LAWS AMENDMENT (2007 MEASURES No. 5) BILL 2007




    SUPPLEMENTARY EXPLANATORY MEMORANDUM




 Request for amendments to be moved on behalf of the Government




                 (Circulated by authority of the
             Treasurer, the Hon Peter Costello, MP)
Table of contents
General outline and financial impact....................................................... 1

Chapter 1           Film production offsets .................................................. 3
General outline and financial impact
Film production offsets
         Schedule 10 to the Bill reforms the taxation arrangements for the
         Australian screen media industry by introducing a refundable film tax
         offset for producers of Australian films (the producer offset).

         Where a film is a series or season of a series that is predominantly a cell,
         stop motion, digital or other animation, the series or season of a series will
         be eligible if each episode of the series or season of a series is at least
         15 commercial minutes in duration.

         Date of effect: The producer offset applies to qualifying Australian
         production expenditure incurred:

                   ·    on or after 1 July 2007; and

                   ·    before 1 July 2007, to the extent that such expenditure is
                       attributable to goods or services provided on or after
                       1 July 2007.

         Proposal announced: These amendments have not previously been
         announced.

         Financial impact: These amendments will have these financial
         implications:

              2007-08              2008-09             2009-10            2010-11
               -$0.1m              -$0.1m              -$0.1m             -$0.1m

         Compliance cost impact: Nil.




                                                                                     1
Chapter 1
Film production offsets

Explanation of amendments 1 and 2

        1.1        Animated series, or animated seasons of a series, with episodes
        of at least 15 commercial minutes in duration are eligible to access the
        producer offset. Such series must be predominantly a cell, stop motion,
        digital or other animation. Episodes of 15 commercial minutes would be
        expected to have an actual duration of at least 10 minutes. Animated
        series, or animated seasons of series, must meet all other requirements that
        apply to series or seasons of series which are not animations.
        [Amendments 1 and 2]




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