Filmmakers Finding More Green in Ireland

DUBLIN —  Ireland has made the fabled pot of gold a reality, at least for its film industry.

At the end of the Emerald Isle’s rainbow is a prize for filmmakers in the form of a tax break that has encouraged production by letting Irish investors save as much as 47% on the cash they invest in making movies in Ireland.

Added to relatively low production costs and plentiful cheap scenery, the tax break makes movie making in Ireland particularly attractive.

Mel Gibson, for example, found it easier to raise $72 million to make his Academy Award-winning film “Braveheart” by shooting it in and around Dublin. This allowed Irish investors to qualify for tax relief, and they put up 10 million punts ($15.9 million), said the film’s producer, Morgan O’Sullivan.

“The tax incentive program has had a profound influence on the Irish film industry,” O’Sullivan said. “It is the most important element that has happened from an Irish producer’s standpoint.”

Tommy McCabe, director of the Irish Business and Employers Confederation’s audiovisual unit, said the tax incentive is crucial in generating finance for the movie industry.

Ireland--and other countries, including France and Canada--offer tax breaks to movie makers for a simple reason: Big-budget movies are a big business.

A November report by the Irish Film Board said 1994 had been the busiest year for the nation’s film production industry, motivated by “the multi-stranded development policy for the industry.” In simple terms: the Irish tax break, known as Section 35, its designation within Ireland’s Finance Act.

The report, which focuses on 61 Irish productions, including 13 feature films, said the tax break was the largest Irish source of movie funding for 1994.

Tax relief, which totaled 42.5 million Irish punts ($67.6 million), represented 32% of all investment in Irish film production, including funds from overseas, and 84% of the funds from within Ireland.

Overall spending on filmmaking in Ireland in 1994, the most recent year for which complete statistics are available, more than doubled, to 123.2 million punts from 58.5 million punts the year before. Film-industry employment tripled in 1994 to 12,784, from 4,191 in 1993.

That’s why the Irish film industry wants to make sure the legislation, which was recently renewed, is extended again in 1999, when it next comes up for review. Without it, Ireland’s movie makers would be devastated, said Sir Sydney Samuelson, head of the rival British Film Commission.

Ed Guiney, a producer at Ireland’s Temple Films, said the legislation was only one incentive.

“Without the tax break, not everyone would get up and crawl home,” he said. “It’s good to have interest from abroad, but on the down side the large American films soak up crews and drive up prices.”

Most of the investment in 1994 came from the United States, which contributed 50.4 million punts, or 38.3% of funding, the report said.

Only three films were made in Ireland in 1987, the year the tax break was introduced, said the Ministry of Arts, Culture and the Gaeltacht, which certifies applications for the tax reprieve. In 1994, 18 feature films and 11 TV dramas had been shot or were in production.

Last year, 20 feature films were cleared by the ministry for tax breaks, although authorization doesn’t guarantee a film will go into production.

The tax break initially let companies qualify for tax relief on as much as 100,000 punts a year in film production investments. By 1993, that limit was raised to 350,000 punts.

Individual investors can write off as much as 25,000 punts a year. The aggregate limit for all investors in any one movie is 2 million punts a year, up from 1.05 million punts over three years.

To qualify, movie investments must “make a significant contribution to the national economy and exchequer or act as an effective stimulus to the creation of an indigenous film industry,” the tax law reads.

Allowances are limited to 60% of productions that cost 4 million punts or less, while 50% can be claimed on productions costing between 4 million and 15 million punts. Only 10% of a movie has to be made in Ireland to be eligible for relief, said James Flynn of the Irish Film Board.

Without the break, Irish investors would be subject to a 38% corporation tax rate. Foreign movie production companies only save money by attracting the Irish to invest in their films. Individuals pay 47% of their income in taxes.

For example, say an Irish individual investor puts in 20,000 punts. Of that, 9,400 punts will be written off against taxes, making film investment a less-risky venture.

Such incentives not only attract investment from the United States and continental Europe, but films that might have been produced elsewhere wind up at Ardmore, Ireland’s biggest film studio, 20 miles south of Dublin.

“It has been difficult to enter a cooperative business arrangement” with a foreign film company without the tax lure, said Kevin Moriarty, Ardmore’s chief executive.

Ireland is a land of storytellers, he said. “Unless we are in a position to bring storytelling ability to the screen, Irish talent will never be known.”