Incentives

South Africa increasingly offers attractive incentive schemes, including those offered by the Department of Trade and Industry (dti), Industrial Development Corporation (IDC) and National Film and Video Foundation (NFVF). The South African Revenue Services (SARS) also offers tax incentives.

The South African Department of Trade and Industry (dti)

The dti offers incentives to increase local content generation and improve location competitiveness for foreign film productions.

The incentives are:

• the Location Film and Television Production Incentive, to attract foreign-based film productions to shoot on location in South Africa, and
• the South African Film and Television Production Incentive, which aims to assist local film producers in the production of local content.

Download the dti guidelines or visit the dti website: www.thedti.gov.za for further information.

The dti's Chief Director of Incentive Administration is Francisca Strauss at +27 (0)12 394-1259 or fstrauss@thedti.gov.za

Industrial Development Corporation (IDC)

The IDC offers the following financing facilities:

• Equity Investment, involving direct investment into a project in the form of ordinary and/or preference equity ownership and participation of up to 49% (minority interest), as the IDC does not seek control or direct management participation.
• Commercial Loan/ Debt Finance. Term loans up to six years are structured to fit the business cash flow profile (i.e. asset-based finance and working capital). Owner's contribution required for adequate financial structuring of the project.
• Venture Loans (Quasi-equity). Minority interest in high-risk ventures with high financial returns and developmental impact.

Funding of R1-million or more is available from the IDC. Full details of the application requirements and process are available on the IDC website.

For detailed information visit the Media and Motion Pictures section of the IDC website (www.idc.co.za)

Due to the complex nature of some of the above funding and tax schemes it is advisable that a tax advisor be consulted. For a list of tax specialists please visit the GFC Directory.

National Film and Video Foundation of South Africa (NFVF)

The NFVF will consider funding support for the production of films and documentaries, either through repayable loans or grants. NFVF funding is primarily as an investment and the foundation recoups its expenditure on delivery of the finished product.

In the case of a co-production, recoupment applies only to the South African distribution component. If a product is not completed, the NFVF reserves the right to be reimbursed. Only South African-owned production companies with reasonable experience may apply for production funding in the genres of documentaries, feature films, short and specialised film and video productions, pilot of a television series with broadcast commitment or animation and multimedia projects with an audiovisual component.

The NFVF also accepts applications for funding in the areas of education and training; development; and marketing & distribution.

For further information visit www.nfvf.co.za

Tax incentives

The South African Revenue Services (SARS), through Section 24F of the Income Tax Act, grants a deduction of the production cost of a film to the film owner. It excludes any deductions for production costs or any allowances relating thereto under any other provisions of the Income Tax Act and provides for a film allowance instead. Section 24F also provides that a film owner may deduct a film allowance from his income. It is advised that if a production wishes to access Section 24F, a specialist tax professional in this area be consulted.

Click here for further information, compiled by the National Film and Video Foundation.

Due to the complex nature of some of the above funding and tax schemes it is advisable that a tax advisor be consulted. For a list of tax specialists please visit the GFC Directory.