Finance Act 2024 - S.481 Film Tax Credit and EIIS Scheme

S.481 Film Tax Credit amendments

The S.481 Film Tax Credit is being amended to include an 8% uplift for qualifying low budget films “the enhanced credit for lower budget films”.

Key features of the enhanced credit

1.     Eligibility criteria:

• Applies to feature films or animated films of feature length with qualifying expenditure below €20m.
• Key creative roles, such as director or screenwriter, must be performed by Irish or EEA nationals.

2.     Application process:

• Eligibility for the enhanced credit will be integrated into the application process for a cultural certificate from the Department of Tourism, Culture, Arts, Gaeltacht, Sport, and Media.

3.     Location flexibility:

• Unlike the previous Regional Film Development Uplift under S.481, there are no location-based production requirements within Ireland for this enhanced credit.

New tax credit for unscripted programmes

In further positive news for the screen industry, a new tax credit for unscripted programmes was introduced in the Finance Act.

1.     Eligibility and certification:

• Similar to the S.481 Film Tax Credit, programmes must undergo cultural certification by the Department of Tourism, Culture, Arts, Gaeltacht, Sport, and Media to qualify.

2.     Credit details:

• The credit will cover 20% of the lower of:
  • Irish eligible expenditure.
  • 80% of the total cost of production.
  • €15m.

Conditions and Guidance

• Both the Enhanced Credit for Lower Budget Films and the Unscripted Programmes Tax Credit are subject to EU state aid approval and a commencement order.
• Revenue guidance on these new credits will be issued following EU state aid approval.

EIIS amendments

Finance Act 2024 introduced several amendments to the Employment Investment Incentive Scheme (EIIS), effective from 1 January 2025, with one change backdated to 1 January 2024. 

Overview of EIIS

The EIIS aims to encourage individuals to invest in Irish companies by offering tax relief on qualifying investments.

• A qualifying investor can receive up to 40% tax relief, depending on the risk profile of the investment.
• Example: An EIIS investment of €50,000 could result in tax relief of €20,000, reducing the real cost of the investment to €30,000.

Key amendments

1.     Increased investment limit (Effective 1 January 2025):

• The maximum qualifying investment per investor is increased to €1m, doubling the previous limit.

2.     Enhanced tax relief for follow-on risk finance investments (Backdated to 1 January 2024):

• For shares issued from this date, the effective rate of relief is increased from 20% to 35% for follow-on risk finance investments where all members of the Relief for Investment in Corporate Trade (RICT) group have been operating in any market within the 7–10 year eligibility period.
• The effective rate for all other follow-on risk finance investments remains at 20%.

3.     Extension of the scheme:

• The availability of the EIIS is extended until 31 December 2026.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of our corporate tax team.