Animation Ireland Encourages Government To Extend Existing Tax Credits Through 2029

Animation Ireland, the business group representing Irish animation studios, has called on the country’s government to extend its tax relief benefits to allow the country to continue to grow its world-class industry.

The current tax relief legislation allows films, tv series, documentaries, and animation productions produced in Ireland to receive a 32-35% tax credit, depending on where production is executed. Referred to as Section 481, the code has a €70 million ($69.84 million) per project cap and is available on all goods and services sourced in Ireland.

The plan runs in five-year cycles, with the existing program set to expire December 31, 2024, although an eventual renewal of the credit system is seen as likely by many in the industry. However, due to the lengthy production process required for animation, Animation Ireland is pushing the government to renew the plan as soon as possible.

“What we’re calling for today is the extension of S481 beyond 2024,” Animation Ireland chief executive Ronan McCabe told Cartoon Brew. “Because animation production is a multi-year process, there are decisions being made today about productions that may start in 2022 or 2023 but that will roll into 2024 and beyond. If the government announces they’re going to extend the tax credit, it will give the industry certainty from 2024 to 2029.”

Ireland’s tax rebates are a matter of concern for the European and U.K. animation industries as well. Ireland hosts 42 animation studios and more than 2,500 animation employees, many of whom come from other parts of the E.U. and the U.K.

“Any studio in Ireland tends to look a bit like the United Nations,” McCabe explained. “Ireland employs and has access to staff from all across the European Union and as we have a really good reputation for our animation content, people want to come to Ireland to work. There is also a Common Travel and work arrangement between Ireland and the U.K., so there are lots of British staff working here too.”

Tax rebates are the name of the game in international film and tv production. The most resilient and fastest-growing national industries tend to belong to countries which offer the most aggressive incentives.

Backed by Section 481, Ireland has built a reputation in animation that’s second to none. Apart from impressive and award-winning work done on domestic productions – such as Cartoon Saloon’s Oscar nominees Wolfwalkers, The Breadwinner, and The Secret of Kells – a great deal of international animation work is also done in the country, including major American productions such as Fox’s The Bob’s Burgers Movie and Netflix’s The Cuphead Show (pictured at top), both of which featured work done by Lighthouse Studios in Kilkenny.

“There are so many countries and territories offering tax credits around the world that to stay competitive it’s important that Ireland has its tax credits in place and certainty with regard to the extension until 2029,” said McCabe, emphasizing the importance of getting Section 481 extended as soon as possible.

McCabe also explained that Animation Ireland would like to see a reinforcement of the regional uplift element of the tax program, which is aimed at decentralizing the country’s screen industries away from more populous areas. The current plan offers projects substantially produced in regions outside of several high population centers up to an additional 3% rebate, pushing the total possible rebate on Irish spend from 32% to 35%.