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European co-production to provide future for Irish film industry Back  
The inaugural Film Industry Conference, addressing the Changing Landscapes of European Film Finance, took place on Thursday, 23 February on the back of the recently enhanced incentive scheme for Irish film production in the Finance Bill 2006.
The Finance Bill’s improvements to Section 481 was announced at a time when Ireland faces growing competition from growing regions like eastern Europe. The Finance Bill will hopefully assist to increase or even maintain the level of investment and activity in the industry. However, Jim O’Hanlon, a director in PricewaterhouseCoopers’ entertainment and media practice, addressing the conference warned, ‘In recent years Ireland’s main competitors have been attempting to attract foreign investment either by virtue of their low cost base, or the incentive levels offered. A number of these latter countries offer a higher contribution to budget than Ireland currently does. In addition, countries like Hungary are fighting on both fronts by introducing tax incentives in a low cost environment. Another key challenge is the recent change to a tax credit system in the UK. The nature of these changes is such that the previous Irish/UK financing model will need to change dramatically with Ireland having to fight harder to maintain the same level of UK/Ireland co productions’.

Not only is the incentives competition stepping up but producers are now likely to be competing for less available investment funds. The industry trend has been a reduction in the level of direct investment available from Hollywood/distributors/ broadcasters and therefore there is a real need to maximise the level of incentives that can be obtained. The US has started to circle the wagons and is trying to stem the tide of ‘runaway productions’’ to Europe and other locations by keeping production within the US. In Europe, German tax based film funds formerly provided significant investment funds for production, but in the last few months legislation was introduced which has effectively brought this investment source to an end. In this environment producers need to consistently seek new sources of potential finance.

O’Hanlon concluded, ‘Within such a changing landscape, the recent proposed Government changes to Ireland’s tax incentives will certainly help Irish producers in their efforts to try and ensure Ireland continues to attract foreign investment. However, it is becoming increasingly difficult for a country like Ireland to be the sole location for film production, but the increased level of our incentives certainly strengthens producers hands in arguing for Ireland to be one of the co-production partners. Instead of direct competition, collaboration by European countries within a co-production framework is likely to be the future, as filmmakers try to maximise the level of incentives they can benefit from in order to finance film production in the current challenging environment’.

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