Incentives and Tax Breaks for Film Provided by Financing Film Tax Credits

Let’s take a break, would you? Yes, we’ll do that since we’re sharing information here about the real world of movie tax credits in Australia – they’re more accurately referred to as film tax breaks in the world of Australian film incentives in Australia.

We further stress to our clients that as Australia continues to gain traction in the world of government-sponsored tax credits in the film, television, and animation industries, the actual financing of these credits will play a critical role in the overall ‘financial package’ of your project.

The key to any successful business is teamwork, and hiring a competent team of finance professionals R&D tax incentive consultant is a must when it comes to film tax credit financing. It is just a question of maximizing your credit cards and reducing downtime spent wading through what can sometimes be described as a confusing maze of financing possibilities.

The producers and owners of productions in our 3 key areas (movies, TV, animation) can recover a large percentage of their investment within guidelines outlined by provincial and federal governments. Furthermore, if you factor in the financing of tax credits, this cash flow turns out to be extremely beneficial to overall project viability. Occasionally, you may find that financing your tax credit is not merely a ‘nice to have’, but a ‘must have’.

What are the ways in which you can take advantage of Australian film tax credits? The typical independent budget that we see ranges between a million dollars (sometimes less) up to five million dollars. If you shoot or produce your film in the right place and file your tax credits in the right place, you can typically expect tax breaks between 30% and 45%. This is a large part of your overall budget, and consumes a large chunk of your overall financial plan, unless we’re overlooking something.

You must also be successful in securing the balance of your financing, which is typically equity money, debt, and the proverbial “gap financing” to make up the total picture. Unfortunately, the film tax incentives do not provide you with a monetary reprieve. A tax credit in effect helps your total finance package to come together.

In many instances, producers and project owners are successful in raising the other components of the financing since they know the tax credits will be utilized and hopefully generate cash flow. As a great addition to your investment toolkit, Australian film tax credits are a great finance option. 

Hard work is all that goes into film financing. A trustworthy, credible and experienced consultant can help you obtain and access your Australian film tax credit. The process is fairly straightforward and consists of demonstrating you have a credible project budget, a reliable bookkeeping and accounting team and a skilled third party opinion that your credit is justifiable and conforms to the rules for production content.

Depending on the terms of the credit agreement, it can be financed at time of final certification, or, in many instances, accrual financing is available – funds are advanced as the project proceeds. The financing process R&D tax incentive services can be accomplished in a matter of weeks and provide valuable working capital and cash flow for your project as an alternative financing method.