New Zealand Screen Production Rebate Details Announced

New Zealand Screen Production Rebate Details

The Hīkina Whakatutuki Ministry of Business, Innovation and Employment (MBIE) and the Manatū Taonga Ministry for Culture and Heritage (MCH) have released details of the revamped New Zealand Screen Production Rebate (NZSPR). The changes aim to generate economic and cultural benefits for New Zealand's film industry.

The administrator of NZSPR, Te Tumu Whakaata Taonga (New Zealand Film Commission - NZFC), is committed to swift and effective implementation to ensure the benefits are realized quickly. The process will be kept simple and clear to garner confidence in the sector, both domestically and internationally. Industry members will collaborate to ensure a smooth execution of the changes.

MBIE and MCH will conduct a one-year operational check to ensure the changes function as intended.

Summary of the New NZSPR Settings:

International Productions:

The redeveloped 5% Uplift is designed to attract high-value international productions, bringing greater economic and cultural advantages to New Zealand. The changes to the Uplift are as follows:

Streamlined Process: Starting November 1, eligible productions with a minimum of $30 million Qualifying New Zealand Production Expenditure can apply for the 5% Uplift. The New Zealand Screen Production Rebate Panel will assess applications using clear and transparent criteria.

Increased Flexibility: The criteria for the Uplift will provide more opportunities to meet the 40 point threshold, catering to the unique needs of different projects.

Objective Criteria: The updated criteria will set clear expectations, ensuring that productions understand the level of activity required.

Focus on Workforce Development: The new criteria will emphasize specific skills and training requirements, creating more job opportunities and career development prospects for New Zealanders.

Māori Representation: Points will be awarded for Māori cast and personnel appointed in lead roles and above-the-line positions, acknowledging and promoting Māori talent.

Sustainability Criteria: The introduction of mandatory sustainability plans aligns with New Zealand's commitment to transitioning to a low-emissions economy.

Repeat Business Incentives: The changes encourage studios and productions to return to New Zealand for repeat projects.

Applications for the redeveloped 5% Uplift will open on November 1, 2023, with comprehensive documentation and guidance provided beforehand.

The Post-Production, Digital, and Visual Effects (PDV) rebate will return to a flat rate of 20%, and the qualifying expenditure threshold will be reduced to $250,000. These adjustments will create opportunities for a broader range of activities to take place in New Zealand. The new PDV setting will be effective from August 31, 2023, enabling productions beginning a continual schedule of PDV activities from that date to benefit from the incentives.

Domestic Productions:

Domestic productions will now have increased access to the NZSPR in addition to production funding from NZFC, NZ On Air, and Te Māngai Pāho, bolstering New Zealand content. Furthermore, three technical changes will be made to the domestic criteria:

Permanent Interim Rebate Payments: Following the success during the COVID pandemic, the allowance for interim rebate payments will become a permanent feature. This recognition will enable production loans to be repaid earlier, leading to improved cash flow during production.

Cap on Above-the-Line Costs: The domestic rebate will impose a 25% budget limit on 'above-the-line' expenses, which cover development expenditure, remuneration, and travel costs of key personnel such as writers, directors, producers, and lead cast. Exceptions to this limit may be allowed in exceptional circumstances, with guidance from NZFC to ensure fair and consistent application.

Market Attachment Definition Update: Productions seeking the domestic rebate must secure 'market attachments' from unrelated parties, indicating support from the broader market. The update will recognize legitimate market attachments from related entities, provided they operate independently. This change ensures the rebate remains future-proof amid potential business mergers in the New Zealand screen sector.

These domestic changes will be effective from August 31, 2023, except for the above-the-line cost cap, which will only apply to productions that have not received provisional certification by that date.

In conclusion, the NZSPR changes are tailored to stimulate the New Zealand film industry's growth and preserve its cultural heritage. With simpler implementation processes and attractive incentives for both international and domestic productions, the NZFC and related ministries aim to achieve significant economic and cultural benefits for the country.

Photo by Dan Freeman on Unsplash