Irish Film and Digital Games Tax Credit (Section 481 and 481a)

What is the Irish Film Tax Credit?

The Irish Film Tax Credit is a valuable incentive available to producer companies in the film and film production industry. It allows producers to use film relief as a credit against Corporation Tax, with Revenue paying the difference if the relief exceeds the tax due.

The credit is 32% of whichever is the lowest of:

• All eligible expenditure
• 80% of total qualifying film production costs
• €125 million

This makes Ireland one of the most attractive destinations for film production in Europe.

Who Qualifies?

Eligible Project Categories

To qualify for the Irish Film Tax Credit, your project must fall into one of the eligible categories under the Film Regulations 2019:

• Feature films
• Short films of feature quality
• TV drama (single or series)
• Animation (excluding computer games)
• Creative documentary

Qualifying Expenditure

The credit is based on Irish-incurred costs, including:

• Cast and crew working in Ireland (regardless of nationality)
• Goods and services sourced in Ireland
• Post-production and VFX work

All expenditure must be wholly, exclusively, and necessarily incurred on production.

Minimum Thresholds

• Minimum production spend: €250,000
• Minimum eligible expenditure: €125,000

Cultural Certification

Your project must receive a certificate from the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, confirming that it fulfils:

• Culture Test - The project meets cultural criteria
• Industry Development Test - The project contributes to industry development
• Must be applied for at least 21 working days prior to the commencement of the main body of the Irish production)

New 40% enhanced credit for ‘lower budget films’

Where the relevant criteria are met on completion of a qualifying film (see 4.1), the film credit may be calculated using an enhanced rate of 40%, rather than the standard rate of 32%.

Defined as:

• Feature film or animated feature where intended for theatrical release **intended to be shown to the paying public at an Irish Cinema or theatre for at least 5 days
• At least one key creative role filled by an Irish or EEA national/resident
• Qualifying expenditure < €20 million
• Applies only to productions eligible for certification under s481

What is the Digital Games Tax Credit?

The Irish Digital Games Tax Credit is a valuable incentive available to digital game developers to encourage the production of games that contribute to the promotion and expression of Irish and European culture. It allows developers to use digital gaming relief as a credit against Corporation Tax, with Revenue paying the difference if the relief exceeds the tax due.

The credit is 32% of whichever is the lowest of:

• All eligible expenditure
• 80% of total qualifying film production costs
• €25 million

Who Qualifies?

Eligible Project Categories

To qualify for the Irish Digital Games Tax Credit, the game must pass the culture test and incorporate at least three of the following classes of information:

• Text
• Sound
• Still Images
• Animated images

A game is exempt from claiming the credit if it does any of the following:

• encourage or incite a person to commit crimes
• stir up hatred against a group on account of their race, colour, nationality, religion, ethnic or national origins, membership of the travelling community or sexual orientation
• deprave or corrupt persons who view it through obscene or indecent matter
• depict acts of gross violence or cruelty

Additionally, games are exempt if they are developed as part of a marketing campaign or if they act to reward users with money or equivalent as the result of a game of skill or chance. 

Qualifying Expenditure

The credit is based on Irish-incurred costs, including:

• Employment Costs
• Equipment Costs
• Consumable items and intellectual property rights
• Subcontractor payments up to €2,000,000

All expenditure must be wholly, exclusively, and necessarily incurred on production.

The credit excludes:

• Expenditure in designing the initial concept for the digital game
• Expenditure in debugging or maintenance of a completed digital game
• Subcontractor expenditure exceeding €2,000,000

The qualifying expenditure must be at least €100,000 to be allowed to claim the credit. 

Cultural Certification

Your project must receive a certificate from the Minister for Culture, Communications and Sport, confirming that it fulfils the Culture Test. This process can take up to 28 working days, but it can exceed this time. It is crucial that the culture test is addressed as early in the process as possible.