EXPLANATORY STATEMENT

Refundable Film Tax Offset Rules 2002

(Amendment No. 1 of 2003)

Issued by the authority of the Minister for the Arts and Sport.

Purpose

This instrument amends the Refundable Film Tax Offset Rules 2002 (the Rules) to:

(a)                  provide a time limit within which the Film Advisory Board (the Board) is required to notify an applicant for a provisional certificate in relation to a refundable film tax offset of a decision refusing to issue a provisional certificate in relation to the film;

(b)                 correct some minor typographical errors contained in the Rules;  and

(c)                  clarify the rules in relation to what documentation must accompany an application for a certificate of entitlement to claim a refundable film tax offset.

Refundable Film Tax Offset Rules

Division 376 of the Income Tax Assessment Act 1997 (the Act) contains provisions which entitle a film production company to claim a refundable tax offset for Australian expenditure in making a film in certain circumstances. Once a film has been completed, a film production company may apply to the Minister for a certificate of entitlement to claim the offset.  Provided the Minister is satisfied that the statutory requirements for the offset have been met, the Minister may issue a certificate.

Section 376-105 of the Act allows the Minister to make rules to establish the Board, to govern the issue of provisional certificates, and to specify how applications for certificates are to be made.  The making of the Rules was notified in the Commonwealth of Australia Gazette No. S 219 on 26 June 2002.  The Rules were made on 25 June 2002.

The Minister is empowered by section 376-105 of the Act and subsection 33(3) of the Acts Interpretation Act 1901 (the Acts Interpretation Act)  to repeal, rescind, revoke, amend or vary the Rules.  Subsection 376-105(6) of the Act provides that the Rules are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act.  This instrument is also a disallowable instrument for the purposes of the Acts Interpretation Act.

The Rules provide for a company to apply to the Board for a provisional certificate.  The amendment to rule 23 is intended to impose a time limit on the Board in notifying the applicant of a decision refusing to issue a provisional certificate.

The Rules provide for certain documentation to be attached to an application for a certificate.  Subrule 25(3) summarises the required documents to be those specified in Part B of Schedule 2 and an expenditure statement prepared in accordance with rule 26.  Although subrule 26(6) states that an auditor’s statement in the form in Schedule 3 must accompany the expenditure statement, the summary at subrule 25(3) does not repeat that requirement.  The amendment to subrule 25(3) is intended to clarify that subrule and make it an easier reference for applicants as to what documents must be provided.

Notes on Clauses

Clause 1 of the instrument provides for the citation of the instrument as the Refundable Film Tax Offset Rules 2002 (Amendment No. 1 of 2003).

Clause 2 of the instrument provides that the instrument commences on gazettal, in accordance with sections 46A and 48 of the Acts Interpretation Act.

Clause 3 of the instrument provides for the Rules to be amended as set out in the Schedule.

The Schedule to the instrument:

[1] substitutes the note to rule 6.  Substituted rule 6 corrects typographical errors in reference to section 376 which had been typed incorrectly as section 375.

[2] substitutes the note to subrule 19(1).  Substituted subrule 19(1) corrects a typographical error in reference to section 376 which had been typed incorrectly as section 375.

[3] substitutes subrule 21(2).  Substituted subrule 21(2) corrects a typographical error in reference to subrules 28(2)-(6) which had been typed incorrectly as subrules 27(2)-(6).

[4] inserts a new subrule 23(3).  New subrule 23(3) requires the Board to issue a written notice of its decision not to issue a provisional certificate for a film as soon as practicable, and in any event within 28 days from the date of the Board’s decision.  This is the same time limit that applies to an application for a statement of reasons under the Administrative Decisions (Judicial Review) Act 1977.

[5] substitutes paragraph 25(3)(b).  Substituted paragraph 25(3)(b) clarifies that an auditor’s statement in the form in Schedule 3 also must be included with the expenditure statement pursuant to rule 26.

[6] substitutes the second dot point under the heading Information about the film in Part A of Schedule 1.  The substituted dot point corrects a typographical error in reference to paragraphs 376-15(1)(d) and (e) of the Act which had been typed incorrectly as paragraphs 375-15(d) and (e).

[7] substitutes the second dot point under the heading Information about the film in Part A of Schedule 2.  The substituted dot point corrects a typographical error in reference to paragraphs 376-15(1)(d) and (e) of the Act which had been typed incorrectly as paragraphs 375-15(d) and (e).