South African Department of Trade and Industry production and post-production incentives

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South African Department of Trade and Industry production and post-production incentives --

Tue, 29 Jul 2014 10:45

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The South African Department of Trade and Industry (DTI) has developed incentives to attract international investment and production as well as to assist South African filmmakers in developing local content.

The Foreign Film and Television Production and Post-Production Incentive is geared towards increasing skills, creativity and employment opportunities within the local film industry by promoting the country as a valuable production destination to international players.

The Foreign Film and Television Production and Post-Production Incentive offers:

Shooting on location in South Africa, the incentive is 20% of the Qualifying South African Production Expenditure (QSAPE) - there is no cap for this incentive

Shooting on location in South Africa and conducting post-production with a Qualifying SA Post-Production Expenditure (QSAPPE) in SA of R1.5m, the incentive is 22,5% of QSAPE and QSAPPE (an additional 2,5%, cumulative 22,5%)

Shooting on location in South Africa and conducting post-production with a QSAPPE of R3m and more in SA, the incentive is 25% of QSAPE and QSAPPE (an additional 5%, cumulative 25%)

Foreign post-production with QSAPPE of R1.5m, the incentive is 22,5% of QSAPPE

Foreign post-production with QSAPPE of R3m and more the incentive is 25% of QSAPPE

Incentives are granted to foreign-owned qualifying productions and South African qualifying post-production work where:

QSAPE is R12m and more, provided that at least 50% of the principal photography schedule is filmed in South Africa, for a minimum of four weeks

QSAPPE is R1.5m and more, provided that 100% of the post-production is conducted in South Africa, for a minimum of two weeks

An applicant must be a Special Purpose Corporate Vehicle (SPCV) incorporated in the Republic of South Africa solely for the purpose of the production and/or post-production of the film or television project

An applicant must be the entity responsible for all activities involved in the production and/or post-production in South Africa and must have access to full financial information for the whole production and post-production worldwide

Only one entity per production and/or post-production for film, animation and television drama or documentary series is eligible for the incentive

The applicant must comply fully with its obligations in terms of the Legal Deposit Act 54 of 1997

The DTI requires both the SPV and the parent company of the SPV to achieve a minimum level of compliance with regard to Broad-based Black Economic Empowerment (B-BBEE). This is determined in accordance with a points scoring system and is subject to independent verification

The final application must include a DVD of the final film, including the end- crawl (closing credits)

The DTI requires a credit in the end-crawl, which must include its official logo.

A feature film must be no less than 90 minutes (including end credits) and a television series may be no more than 13 episodes of one hour each

The DTI only pays the rebate upon submission of the final application, which may only take place upon completion of the production (completion is defined as the date upon which the project is ready for distribution, exhibition or broadcast).

The main focus of the South African Local Production and Post-Production Incentive is to encourage the creation of local content and to increase employment opportunities in the country.

The rebate is calculated as 35% of the first R6m of QSAPE and 25% of the QSAPE on amounts above R6m.

South African Local Production and Post-Production Incentives are granted to productions which:

Qualify as a South African film or as a South African co-production under an official co-production treaty. Coproduction certification is administered by the National Film and Video Foundation (NFVF)

Special Purpose Corporate Vehicles (SPCV) incorporated in the Republic of South Africa solely for the purpose of the production of the film or television project

The SPCV and parent company or companies must have a majority of South African shareholders of whom at least one shareholder must play an active role in the production and be accredited in that role

An applicant must be the entity responsible for all activities involved in making the production in South Africa and must have access to full financial information for the whole production

Only one film production, television drama or documentary series per entity is eligible for the incentive

The following formats are eligible: feature films, tele-movies, television drama series, documentaries and animation. The DTI is in the process of adding digital content and gaming

The incentive is available only to qualifying South African productions with a total production budget of R2.5m and more. However, the DTI is in the process of making the rebate available for projects that do not undertake shooting in South Africa but undertake a certain level of post-production within South Africa.

If the film is not bonded, the DTI only pays the rebate upon submission of the Final Application, which may only take place upon completion of the production (completion is defined as the date upon which the project is ready for distribution / exhibition / broadcast).

If the film is bonded the DTI will pay the rebate at milestones during the production process, as follows:

% of rebate Milestone

20% Confirmation of Completion Bond

20% Start of principal photography

20% Completion of principle photography

20% Commencement of post-production

20% Submission of the Final Application

DTI contacts

Wendy Mphahlele: WMphahlele@thedti.gov.za 27 (12) 394 1876

Rudi Siefert: RSiefert@thedti.gov.za 27 (12) 394 1270

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