11B Film production expenditure

(1) In section DS 2(4),—

(a) in paragraph (a), “government screen production payment” is replaced by “large budget film grant”:

(b) in paragraph (b), “government screen production payment” is replaced by “large budget film grant”.

(2) In section DS 2, in the list of defined terms,—

(a) “government screen production payment” is omitted:

(b) “large budget film grant” is inserted.

New clauses 14B to14E

To insert, after clause 14, the following:

14B Expenditure incurred in acquiring film rights in feature films

(1) In section EJ 4(1)(b), “government screen production payment” is replaced by “large budget film grant”.

(2) In section EJ 4, in the list of defined terms,—

(a) “government screen production payment” is omitted:

(b) “large budget film grant” is inserted.

14C Expenditure incurred in acquiring film rights in films other than feature films

(1) In section EJ 5(1)(b), “government screen production payment” is replaced by “large budget film grant”.

(2) In section EJ 5, in the list of defined terms,—

(a) “government screen production payment” is omitted:

(b) “large budget film grant” is inserted.

14D Film production expenditure for New Zealand films having no government screen production payment

(1) In the heading to section EJ 7, “government screen production payment” is replaced by “large budget film grant”.

(2) In section EJ 7(1)(a), “government screen production payment” is replaced by “large budget film grant”.

(3) In section EJ 7, in the list of defined terms,—

(a) “government screen production payment” is omitted:

(b) “large budget film grant” is inserted.

14E Film production expenditure for other films having no government screen production payment

(1) In the heading to section EJ 8, “government screen production payment” is replaced by “large budget film grant”.

(2) In section EJ 8(1)(a), “government screen production payment” is replaced by “large budget film grant”.

(3) In section EJ 8, in the list of defined terms,—

(a) “government screen production payment” is omitted:

(b) “large budget film grant” is inserted.

Clause 32

New subclauses (4B) and (4C): To insert, after subclause (4), the following:

(4B) The definition of government screen production payment is repealed.

(4C) After the definition of LAQC, the following is inserted:

“large budget film grant means a payment that—

“(a) is in the nature of a large budget screen production grant or post-production digital and visual effects grant; and

“(b) is made in relation to a film or television production; and

“(c) is authorised by the New Zealand Film Commission in relation to a company that—

“(i) is resident in New Zealand:

“(ii) has a permanent establishment in New Zealand”.

Clause 36

New subclause (2B): To insert, after subclause (2), the following:

(2B) After the definition of government agency, the following is inserted:

“government screen production payment means a payment that—

“(a) is in the nature of a large budget screen production grant, post-production digital and visual effects grant, or New Zealand screen production incentive; and

“(b) is authorised by the New Zealand Film Commission in relation to a company that—

“(i) is resident in New Zealand:

“(ii) has a permanent establishment in New Zealand”.

Explanatory note

This Supplementary Order Paper changes the treatment by the Income Tax Act 2007 of expenditure on films that receive a New Zealand screen production incentive and provides expressly for the treatment of expenditure on films that receive a post-production digital and visual effects grant.

The Taxation (International Taxation, Life Insurance and Remedial Matters) Act 2009 amended the Income Tax Act 2007 to give expenditure on films receiving a New Zealand screen production incentive the same treatment as expenditure on films receiving a large budget screen production grant. Amendments in this Supplementary Order Paper amend the Income Tax Act 2007 to provide that the treatment of expenditure on a film does not depend on whether the film receives a New Zealand screen production incentive. The special treatment under the Act of expenditure on films that receive a large budget screen production grant is also expressly applied to expenditure on films that receive a post-production digital and visual effects grant. This change confirms the current treatment of such expenditure. The amendments to the Income Tax Act 2007 include the removal of the definition of government screen production payment and the insertion of a definition of large budget film grant, which means a large budget screen production grant or a post-production digital and visual effects grant.

A definition of government screen production payment is inserted in the Tax Administration Act 1994 for the purposes of provisions relating to the transfer of information on films receiving a New Zealand screen production incentive, a large budget screen production grant, or a post-production digital and visual effects grant.

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Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill - Amendment paper No 105