Income Tax Assessment Act 1997 (ITAA)

Division 376 of the ITAA
This is the Producer Offset legislation. It provides the basis for certifying applicants and calculating QAPE for the Producer Offset, and the sister programs, the Location and PDV Offsets. The document is a compilation of Division 376 taking into account amendments up to January 2022, including those that introduced the 'new rules' in 2011, the definition of 'documentary' in 2013, an amendment to the 'Gallipoli clause' in 2018 and changes to the amount of the Producer Offset and removal of the 65-commercial-hour cap for drama productions in December 2021.

Amendments to the ITAA and associated explanatory documents

The original Producer Offset legislation and relevant amending Acts are set out below. Links to relevant Explanatory Memoranda – which seek to explain the content, objectives and operation of the clauses of the associated Bill – are also included.

Tax Laws Amendment (2007 Measures No. 5) Act 2007 – Sch 10
and
Explanatory Memorandum to the Tax laws Amendment (2007) Measure No.5) Bill 2007. This is the original legislation which introduced the Producer Offset. 

Tax Laws Amendment (2011 Measures No. 7) Act 2011 – Sch 9
and
Explanatory Memorandum to the Tax Laws Amendment (2011 Measures No. 7) Bill 2011. This legislation introduced the ‘new rules’ which amended the calculation of QAPE and the eligibility thresholds. 

Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 – Sch 1
and
Explanatory Memorandum to the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013. This legislation introduced the definition of 'documentary'. 

Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Act 2018 - Sch 3. This legislation amended section 376-170 of the ITTA, which amendment related to the provision commonly known as the Gallipoli Clause. 

Treasury Laws Amendment (2021 Measures No. 5) Act 2021 – Sch 1 and Explanatory Memorandum to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021

This Act introduced the following changes for projects commencing principal photography on or after 1 July 2021:

• The amount of the Producer Offset is 40% for feature films produced for commercial exhibition to the public in cinemas;
• The amount of the Producer Offset for other eligible projects increased from 20% to 30%; and
• Removal of the 65-commercial-hour cap for drama productions.

Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2021 – Sch 6 and Explanatory Memorandum to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2021 – Sch 6

This Act introduced the following changes for projects commencing principal photography after 1 July 2024

• The new per season threshold means that drama series that spend at least $35 million per season in QAPE will be eligible for the Producer Offset and not subject to the per hour minimum QAPE requirement of $500,000. 

Producer Offset Rules and associated explanatory documents

Producer Offset Rules 2018
The Producer Offset Rules specify how applications for provisional and final certificates are to be made to Screen Australia, and set out the procedures by which Screen Australia will consider provisional and final certificate applications. These Rules came into force on 15 February 2018, and repealed the Producer Offset Rules 2007.

Explanatory Statement to the Producer Offset Rules 2018
The Explanatory Statement to the Producer Offset Rules 2018 explains the purpose and operation of the instrument.