Green Light: Section 481


From Star Wars to Vikings, the Irish creative industry is reaping the benefits of the Section 481 tax credit.

It’s not every day you walk into a pub and find Luke Skywalker pulling a pint of Guinness. The Bridge Bar in Portmagee, County Kerry, became a second home for the production crew of the iconic film franchise Star Wars when it was shooting scenes from the last two movies – The Force Awakens and The Last Jedi – on the nearby island of Skellig Michael and along the Wild Atlantic Way. When filming was done, the wrap party was in the Bridge Bar with Mark Hamill, who plays Skywalker, at one stage pulling his own pint.


On the crest of a wave

Now, the bar is attracting a wave of tourists, according to Fiona Monaghan, head of operations in the West at the national tourism development authority Fáilte Ireland.

“They turn up dressed in Luke Skywalker and Darth Vader outfits wanting to pull a pint from that very same tap,” she says. “The Bridge Bar and other cafes and hotels in the areas where the movies were shot are benefiting from significantly increased tourist numbers. We haven’t quantified how many yet, but we are encouraging businesses to meet the rising demand by staying open longer in the winter months, employing more staff and putting on local Star Wars walking tours.”

These rural locations don’t just have the glamorous heroes of science fiction to thank for their new business, but also the rather more prosaic world of tax and accountancy.


Roll the credits…

Pinewood Productions Ireland, which produces the Star Wars films, services Pinewood’s international clients shooting on location in Ireland with tasks ranging from pre-production budgeting and location scouting to facilities rentals and talent and crew sourcing.

It also applies for Section 481 tax relief, which from 1 January 2015 was raised to 32% (from 28%) of eligible Irish expenditure. At the time, Heather Humphreys, the minister for arts, heritage and the Gaeltacht, said that enhanced tax breaks for the film and TV sector would help attract major international film productions to Ireland and boost the indigenous film sector.

“The Irish film and TV production sector supports up to 6,000 jobs. I want to see that number grow,” she said. “The changes to Section 481 will give a greater deal of certainty to the Irish audiovisual sector and will allow it to maintain existing jobs and create new ones. When shows come to Ireland, they hire local talent and crews, and make a huge contribution to the local economy.”


Nearly three years on and it’s clear these aims are being met.

According to the Department of Finance in a written answer to Dáil Éireann on 20 June 2017, there were 32 companies granted relief in respect of 43 films in 2015; 54 companies granted relief for 74 films in 2016; and 15 companies granted relief for 21 films in the first quarter of 2017. This includes Pinewood, Metropolitan Films International’s Vikings series, and Irish independent Mind The Gap Films for its cooking show Lords and Ladles.

According to figures from Screen Producers Ireland’s Annual Report 2016, the value of film, TV and animated projects certified by the Office of the Revenue Commissioners came to €264.8m in 2016, up from €118.6m in 2015. The vast majority came from incoming rather than indigenous productions.


Jobs for the talent and technicians

Much of that investment goes into employing actors and crew as well as indirect benefits to businesses supplying or located near to a shoot. Up to 3,415 full-time equivalent jobs were created over 184 projects in 2015 and 2016, according to another written answer to the Dáil Éireann from Department of Finance on 5 July 2017.


“Section 481 is one of a number of factors that attract overseas firms. But the increase in eligible spend has made a huge difference”


Siún Ni Raghallaigh, Chief Executive, Ardmore Studios


“We have become busier in the past two years, helped by more demand from international firms wanting to become co-producers,” says Siún Ni Raghallaigh, chief executive of Ardmore Studios. “Section 481 is one of a number of factors, such as our infrastructure and English-speaking culture, that attract overseas firms. But the increase in eligible spend has made a huge difference. It has helped bring added stability and continuity to the sector and bigger productions. We are seeing larger crews being employed and three-part series turning into 10-part [series].”

One area of concern she raises is the pressure on studio space in Ireland given the increased demand. An answer to this is expansion, including the new 350,000-square-foot Troy Studios film hub on the outskirts of Limerick.


Ready for action

“The Section 481 tax credit will be an element in making Limerick an attractive location for producers to film in,” says Pat Daly, deputy chief executive of Limerick City and County Council and director of economic development. “The benefit will be for the production company, and by extension the Limerick city region, if a series or movie is filmed here.”

At present the series Nightflyers is preparing to shoot at Troy Studios. Nightflyers is an NBC Universal production of George RR Martin’s 1980 novella. Martin is also the author of Game of Thrones, which has been filmed in Northern Ireland in recent years, providing a notable tourism and economic boost.

“Nightflyers is sourcing a huge amount of raw material locally from suppliers, while a number of engineering businesses in the Limerick city region are also working directly with the production company,” says Daly. “In addition to this, there are hotels in the area hosting many of the overseas workers.”

Innovate Limerick has also created a Production and Digital Skills Academy to take advantage of Troy’s opening.

Elaine Geraghty, Chief Executive of Screen Producers Ireland, says Section 481 is “imperative” for the Irish film industry. “It supports incoming and indigenous productions and helps us compete with other countries in Europe with similar incentives,” she says. “It provides high-end jobs and promotes Ireland to the rest of the world.”

That’s being seen in the pubs of the Wild Atlantic Way and is also a factor in rising tourist numbers throughout Ireland. The country saw a 9% increase in overseas visitor numbers to 10.3 million in 2016, according to Tourism Ireland. While there may be a multitude of pull factors, Sinead Grace, media manager at Tourism Ireland, says: “Screen tourism is definitely an important element of our promotional programme.” It recently launched a promotional billboard into space using a weather balloon to tie in with the release of the latest Star Wars film.


Calling for a sequel

In order for the film sector to remain inflated it is crucial, says Torlach Denihan, director of the Audiovisual Federation, that Section 481 is extended beyond its current expiry date of 2020.

“An early announcement is needed because productions have quite long planning horizons,” he says. “If this is not done the market risks being disrupted, projects lost to competing locations and employment in the sector badly affected. We recommend the removal of the 2020 expiry date and its replacement by a review every five years.”

The Irish government is compiling a report into the economic benefits of the Irish film industry. The Department of Finance says it will analyse and review Section 481 “in advance of any extension of the relief beyond 2020”.


Section 481 in a nutshell

  • The scheme, which dates back to 1993 but was most recently updated in 2015, provides relief in the form of a corporation tax credit related to the cost of production of certain feature films, TV dramas, animation and creative documentary.
  • The credit is granted at a rate of 32% of eligible expenditure based on cost of all cast and crew working in Ireland regardless of nationality, and goods, services and facilities purchased in Ireland, says Pinewood in its Ireland Film & TV Tax Relief Summary.
  • The minimum amount that must be spent on the production is €250,000 and the minimum eligible expenditure amount to qualify is €125,000.
  • Projects must either pass a cultural test or qualify as an official co-production. Production companies applying must be resident in Ireland.

By ContentLive



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