Business Class
Navigating the Producer Offset
Brought to you by…
Supported
by…
Producer Offset Unit
Alex Sangston
Michele McDonald
Colleen Champ
Susan Well
CEL
s
EBRATING
Laure Audidiere
AUST
Louisa Achille
RAL
IAN STORIES
RUTH HARLEY
CEO, SCREEN AUSTRALIA
AS
2
Navigating the Producer Offset
3
Navigating the Producer Offset
Eligibility
• Significant Australian Content (SAC)
• Format
• QAPE threshold
4
Navigating the Producer Offset
SAC matters
1. Subject matter of film
2. The place where the film will be made
3. Nationalities/Residences
4. Budget spend
5. Any other matters
•
Who retains copyright
•
Final approval rights
•
Who receives a share of returns
5
Navigating the Producer Offset
Eligibility
•
Format
•
QAPE
6
7
8
9
10
Navigating the Producer Offset
What is a documentary?
A film is a documentary if the film is a
creative
treatment of actuality, having regard to ...
•
contrived situation
•
explores an idea or a theme
•
overall narrative structure
•
any other relevant matters
11
Navigating the Producer Offset
What is a documentary?
A film is not a documentary if it is:
•
Infotainment or lifestyle program
•
Magazine program
12
13
Navigating the Producer Offset
The Gallipoli Clause
•
Subject matter
•
Principal photography for the film
•
Australian residents
14
15
16
17
18
Navigating the Producer Offset
Theatrical Distribution
Demonstrated bona fide intention
to make a feature film
19
Financing & Cash-flowing
the Offset
Ian Robertson
Alex Sangston
20
Working with the Offset
Ian Robertson with
Lucy MacLaren and Trish Mulhall
21
Getting the assessment done faster
Helen Watts (IFPC)
22
Navigating the Producer Offset
Key documents for
QAPE assessment
•
General Ledger
•
Cost Report
•
QAPE spreadsheet (& worksheets)
23
Navigating the Producer Offset
Key documents for
QAPE assessment
A poorly prepared General Ledger with
insufficient detail is
the most common reason
for the final assessment to be drawn out
24
25
26
Navigating the Producer Offset
QAPE spreadsheet
Key worksheets
•
Worksheet (e) – Interested Party Transactions
•
Worksheet (f) – Development
•
Worksheet (h) – International Travel
•
Worksheets (i) and (j) – Apportioning wages
27
Navigating the Producer Offset
Interested party transactions
Concept of related parties has been broadened
to refer to “interested parties”
28
Navigating the Producer Offset
What is an ‘interested party’?
One who has a relationship with:
•
the applicant company
•
its principals
•
related entities
•
or with the project.
29
Navigating the Producer Offset
What is an arm’s length transaction?
To ensure that expenditure incurred:
•
Is commercially reasonable
•
That the transactions involved real bargaining
•
Not inflated compared to the fair market price.
AS
30
Navigating the Producer Offset
Examples of interested parties
•
Parent / sister company of an SPV
•
Executive Producer
•
Equity investor
•
Party with an interest in the Producer Offset
31
INTERESTED PARTY TRANSACTIONS
Examples
•
SPV hiring equipment from a parent company
•
SPV purchasing post services from a parent
company
•
Parent company providing the services of
parent’s in-house personnel to SPV
•
Reinvestment deal with post-production houses
32
(e) INTERESTED PARTY TRANSACTIONS
THE DETAIL THAT WE EXPECT TO SEE
Code
Date
Payee
Details
Amount
6-0211
11-Apr-12
Parent Company Pty Ltd
Development funds - Offset application fee
$500
6-0231
11-Apr-12
Parent Company Pty Ltd
Marketing & Proposal costs
$7,000
6-0243
11-Apr-12
Parent Company Pty Ltd
Budgets & Schedules
$2,000
60301
11-Apr-12
Parent Company Pty Ltd
Executive Producer Set contract Fee
$20,000
60303
11-Apr-12
Parent Company Pty Ltd
Producer set contract fee
$45,000
60401
06-Nov-12
Parent Company Pty Ltd
Writers Fee (S. Falk) as per contract
$10,000
61001
29-Jun-12
Parent Company Pty Ltd
10wks @ $1760/week Production manager R. Grasby
$17,600
61003
13-Jul-12
Parent Company Pty Ltd
350hrs@$39/hr to 27/6 Production Co-ordinator A. Jones
$13,650
61005
13-Jul-12
Parent Company Pty Ltd
4 weeks @$1200/week Production assistants I. Lambert
$4,800
61101
20-Sep-12
Parent Company Pty Ltd
Production accounting: 20 wks@ $500/wk J. Graham
$10,000
62701
01-Jul-12
Parent Company Pty Ltd
Principal Researcher 144hrs@$50/hr 1/2 to 14/4 G. Cooper
$7,200
65412
20-Sep-12
Hassells Post Production House
61 Discs @$100/disc
$6,100
65412
20-Sep-12
Hassells Post Production House
DVD copies: 61 discs x 3 copies x $5/copy
$915
65512
09-Oct-12
The Parent Company
Archive DVDS viewing copies (Aust. War Memorial)
$40
'6-5528
09-Mar-12
Parent Company Fedex
Archive viewing copies (US)
$101
'6-5528
27-Apr-12
Parent Company Fedex
Archive footage
$400
'6-5528
21-May-12
Parent Company Fedex
Freight Archive previews
$125
'6-5528
14-Aug-12
Parent Company Fedex
Archive courier 30/7/12 Irena Machova
$177
33
(e) INTERESTED PARTY TRANSACTIONS
BAD EXAMPLE
Code
Date
Payee
Details
Amount
68004
06-Nov-12
Parent Company Pty Ltd
Office Rent
$25,000
68005
10-Apr-12
Parent Company Pty Ltd
Production Staff
$18,000
68006
15-Nov-12
Hassells Post Production House
Hire of Edit Suite
$18,500
6-8011
15-Nov-12
Vaulting Productions Pty Ltd
Camera Hire
$16,000
68005
10-Apr-12
Parent Company Pty Ltd
Finance Controller
$70,000
34
(e) INTERESTED PARTY TRANSACTIONS
GOOD EXAMPLE IN DETAIL
Code
Date
Payee
Details
Amount
Office Rent - head office - 5 weeks @ $500/week / 8
68004
06-Nov-12
Parent Company Pty Ltd
July to 15 Dec 13
$25,000
Production Secretary: S. Wells / 20 weeks @
68005
10-Apr-12
Parent Company Pty Ltd
$900/week / 2 Jan 12 to Sept 13
$18,000
Edit Suite: 2 x avids + storage / 10 weeks @
68006
15-Nov-12
Hassells Post Production House
$1,850/week / June 12 to April 13
$18,500
Camera Hire: Canon C500 & accessories /
6-8011
15-Nov-12
Vaulting Productions Pty Ltd
$2,000/week for 8 weeks / Jan 12 to August 12
$16,000
35
(f) DEVELOPMENT EXPENDITURE
Source
Details
Amount
Parent Company Pty Ltd
Development Loan
$14,500
Screen Australia
Development Loan
$3,000
ABC
Development Loan
$15,000
Screen QLD
Development Loan
$15,000
Screen QLD
Interest on Loan
$1,500
Total
$49,000
Code
Date
Payee
Details
Amount
QAPE /
non-QAPE
6-0221
24-Jun-12
Sandwich Productions P/L
Producer Fee - as per contract
$10,000
QAPE
6-0221
17-Jul-12
Write on Films Limited
Writers Fees (as per contract)
$15,000
QAPE
6-0222
16-Mar-12
Parent Company Pty Ltd
Research- A. Johnson - 6 weeks @ $900
$5,400
QAPE
6-0222
16-May-12
Parent Company Pty Ltd
Research(UK) - J. Higgs - 12 weeks @ 450
$2,000
Non-QAPE
6-0231
01-Aug-12
Henry James Junior
Script Polish
$2,000
QAPE
6-0243
17-Jul-12
Office Works
Research Materials
$178
QAPE
6-0221
17-Jul-12
Dennis Lanyard
Legal fees
$2,000
QAPE
6-0221
02-Sep-12
Bayswater Brasserie
Dinner with clients
$158
Non-QAPE
6-0221
17-Jul-12
Screen Australia
Provisional Offset Application Fee
$500
Non-QAPE
6-0223
31-Aug-12
ScreenQLD
Interest on Development Loan
$1,500
Non-QAPE
6-0231
11-Apr-12
Parent Company Pty Ltd
Travel costs associated with MIFF
$8,264
Non-QAPE
6-0243
11-Apr-12
Parent Company Pty Ltd
Budgets & Schedules
$2,000
QAPE
Total QAPE
$36,578
Total Non-QAPE $12,422
36
(h) EXPENDITURE ON FLIGHTS TO AND FROM AUSTRALIA
Date
Name Crew Aust. Flight
No. days Service
Total
QAPE
non
Contract Comments
of
Cast
From
To
Period
in
Provider
Cost
QAPE provided
Travel
Y / N
Aust.
Y / N
UK Exec Prod
16-Feb-12 S. Yeo Crew N
LON
SYD
Shoot
9
Showgroup $3,753 $0
$3,753
(less than 2
weeks)
20-Feb-12 S. Yeo Crew N
SYD
LON
Shoot
9
Showgroup $3,753 $0
$3,753
16-Feb-12 J. Fox
Crew Y
SYD
SING
Shoot
-
Showgroup $3,753 $3,753 $0
Aust travelling
O/S during
shoot.
24-Mar-12 J. Fox
Crew Y
SING
SYD
Shoot
-
Showgroup
37
(j) EXPENDITURE ON A 'NON-AUST' RESIDENT WORKING BOTH IN AUSTRALIA & OVERSEAS
Sample:
US actor working in both Australia and the UK
Total Fee:
$220,000
Rehearsals - Aust
2
weeks
$73,333
QAPE
Shoot - Australia
4
weeks
$146,667
QAPE
non-
Shoot - UK
2
weeks
$73,333
QAPE
Total:
6
weeks
$220,000
NB: All payroll tax and fringes on the overseas portion of the fee would be non-QAPE
38
(k) EXPENDITURE ON AN AUST. RESIDENT WORKING BOTH IN AUST. & OVERSEAS
Scenario:
Aust. Designer working both in the UK & Australia
Total Fee:
$54,000
Pre - Australia
6
QAPE
$18,000
Pre - UK
2
non-QAPE
$6,000
Shoot - UK
2
QAPE
$6,000
Shoot - Australia
6
QAPE
$18,000
Post - Australia
2
QAPE
$6,000
Total
18 weeks
$54,000
Total
QAPE:
$48,000
Total non-
QAPE:
$6,000
39
Navigating the Producer Offset
What to remember
•
Maintain clear and compliant paperwork
•
Ensure the production A/C enters detailed
information into GL throughout production
•
Our assessment is only going to be as good as
the paperwork you submit
40
Navigating the Producer Offset
What to remember
•
The Offset operates under tax legislation
•
The onus is on you to substantiate your claim
•
Criminal and civil penalties apply to persons
who make false or misleading statements
Call the POCU
41
Document Outline
