COMMONWEALTH OF AUSTRALIA
 
 
 
Income Tax Assessment Act 1997
Acts Interpretation Act 1901
 
 
Location Offset Rules 2008 (Amendment No. 1 of 2011)
 
 
I, SIMON CREAN, Minister for the Arts, pursuant to subsections 376-260 (2) and (3) of the Income Tax Assessment Act 1997 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901, hereby amend the Location Offset Rules 2008 made under subsections 376-260 (2) and (3) of the Act.
 
 
 
Dated                                      16th June 2011
 
Signed                                                
                                                            Simon Crean
 
Minister for the Arts
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1.                       Amendment
1.1.                 The Location Offset Rules 2008 (the Rules) are amended as set out in this instrument.
 
2.                       Rule 4
2.1.                 Omit in the examples in the Note at the end of the Definitions the dot point ‘production expenditure’.
 
3.                       Rule 6
3.1         Omit rule 6 and substitute with new rule 6 as follows:
            “6 Application for provisional certificate
                A company may apply to the Board for a provisional certificate, for a film, for the location offset if the company:
               (a)    is an Australian resident; or
               (b)    is a foreign resident, has a permanent establishment in Australia and has an ABN,
              and
                (c)    is carrying out, or is making the arrangements for the carrying out of, all the activities in Australia that are necessary for the making of the film; or
               (d)    is developing the film prior to the establishment of a production company.”
           
4.                       Rule 7
4.1         Omit subrules 7(4), (5), (6) and (7) and substitute with new subrules (4) and (5) as follows:
                “(4) The following documents must be attached to the application:
               (a)    the documents specified in Part B of Schedule 1;
               (b)    an expenditure statement, prepared in accordance with rule 23, for the estimated qualifying Australian production expenditure on the film.
(5)     If expenditure incurred in producing material for use in publicising or otherwise promoting the film is claimed as estimated qualifying Australian production expenditure by the applicant under item 3 of the table in subsection 376‑150 (1) of the Act, evidence that the copyright in the material is held by an Australian resident must also be attached to the application.”
 
5.                       Rule 9
5.1.                 Omit subrule 9(3). 
5.2         Omit in paragraph 9(5)(b) the words “production expenditure or”
 
6.                       Rule 17
6.1.                 Omit subrule 17(3). 
6.2         Omit in subrule 17(4) the words “If the estimated qualifying Australian production expenditure claimed by the applicant for the location offset is at least $50 million, the” and substitute with “The”.
 
7.                       Rule 19
7.1.                 Omit in paragraph 19(4)(b) the words “production expenditure or”
 
8.                       Rule 23
8.1.                 Omit in subrule 23(1) the words and references “paragraphs 7(4)(b) and (5)(b)” and substitute with “paragraph 7(4)(b)”.  
8.2.                 Omit in subrule 23(1) the reference “(9)” and substitute with “(8)”
8.3.                 Omit paragraph 23(2)(c).
8.4.                 Omit subrule 23(3).
8.5.                 Omit in subrule 23(4) the words “If the estimated qualifying Australian production expenditure claimed by the applicant for the location offset is at least $50 million, the” and substitute with “The”.
 
9.                       Rule 24
9.1.                 Omit in subrule 24(1) the words and reference “paragraphs 17(3)(c) and” and substitute with “paragraph 17” .
9.2.                 Omit paragraph 24(2)(c).
9.3.                 Omit subrule 24(3).
9.4.                 Omit in subrule 24(4) the words “If the estimated qualifying Australian production expenditure claimed by the applicant for the location offset is at least $50 million, the” and substitute with “The”.
 
10.                   Rule 25
10.1.             Omit in rule 25 the words and reference “paragraphs 17(3)(e) and” and substitute with “paragraph 17”.
 
11.                   Rule 26
11.1.             Omit in rule 26 the word and reference “(3)(d) or”.
 
12.                   Schedule 1 Part A Clause 1.9
12.1.             Omit Note 1 in clause 1.9 of Part A Schedule 1.
12.2.             Omit in Note 2 of clause 1.9 of Part A Schedule 1 the words “If the total of the applicant’s estimated qualifying Australian production expenditure on the film is at least $50 million, the” and substitute with “The”.
 
13.                   Schedule 1 Part A Clause 2.7
13.1.             Omit clause 2.7 of Part A Schedule 1.
 
14.                   Schedule 2 Part A Clause 1.9
14.1.             Omit Note 1 in clause 1.9 of Part A Schedule 2.
14.2.             Omit in Note 2 the words “If the total of the applicant’s estimated qualifying Australian production expenditure on the film is at least $50 million, the” and substitute with “The”.
 
15.                   Schedule 2 Part A Clause 2.8
15.1.             Omit clause 2.8 in Part A Schedule 2.
 
16.                   Schedule 2 Part B Clause 1.2  
16.1.             Omit subparagraph 1.2(c)(ii) in part B Schedule 2 and substitute with new subparagraph (ii) as follows:
“(ii) included in the qualifying Australian production expenditure claimed by the applicant for the location offset.”
 
17.                   Schedule 3  
17.1.             Omit from Schedule 3 the words:
“[For films with an estimated qualifying Australian production expenditure of at least A$15 million and less than A$50 million — use the following paragraph]
We have examined the attached statement of estimated qualifying Australian production expenditure and production expenditure on the film entitled ______________________________ (‘the schedule’).
[For films with an estimated qualifying Australian production expenditure of at least A$50 million — use the following paragraph]”
 
17.2.             Omit from Schedule 3 in the second paragraph under the heading “Basis of opinion:” the words “production expenditure (as defined in subsection 995-1(1) of the Act) and”
17.3.             Omit from Schedule 3 the words:
“[For films with an estimated qualifying Australian production expenditure of at least A$15 million and less than A$50 million — use the following paragraphs]
On the basis of such examination, we report that, in our opinion, the total of the company’s estimated qualifying Australian production expenditure on the film is Aus $________________, and that this amount represents at least 70% of the production expenditure on the film.
In our opinion, the statement presents fairly, in all material respects, the estimated qualifying Australian production expenditure and the production expenditure on the film entitled _______________________ for the period ended ____________ in accordance with generally accepted accounting principles.
[For films with an estimated qualifying Australian production expenditure of at least A$50 million — use the following paragraphs]”
 
18.                   Commencement and Application
 
18.1       This instrument takes effect on the day and time that the Tax Laws Amendment (2010 Measures No.5) Act 2011 receives the Royal Assent.
18.2       The amendments made by this instrument apply to a film which commences principal photography or production of animated image in Australia on or after 1 July 2010.
18.2       For the avoidance of doubt, despite subclause 18(1), the amendments made by this instrument do not apply to a film which commences principal photography or production of animated image in Australia prior to 1 July 2010.
 
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