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The lure of South Africa

23 March 2010

It's got little to do with the World Cup, but there's a rush on right now for British TV producers to film out in South Africa.

The reason is South Africa’s favourable tax breaks, which have recently attracted the likes of Kudos post apocalyptic BBC1 drama Outcasts and Left Bank’s Sky One drama Strikeback out to the country.

Televisual is putting together a finance special for its April issue, and South Africa is cited as the top destination for producers looking access international tax breaks to help make their production budgets go further.

Stephen McDonogh, head of co-production funding, content & production at BBC Worldwide, gives the following advice:

“I’d say currently the top four tax incentives in TV are of the non-recoupable type based on a return on local qualifying expenditures within the following countries:

1. South Africa: 15% (foreign film - production services) or 35% (co-productions). Good value for money (although ever weakening sterling is reducing this margin!), experienced SA crews and great for winter filming but ZAR10m cap limits benefit on higher budgets.

2. Canada: combining Federal (15%-25%) and Provincial (23%-65%) tax credits (largely limited to qualifying labour expenses only) – rules on higher rates are complex to secure and usually only show a real benefit if there is a significant Canadian broadcaster investment.

3. Ireland: 28% (Section 481) – easy to set up, paid on first day of filming but Ireland remains expensive.

4. France: 20% (TRIPS) – great newcomer, no French language requirements designed for international productions filming in France. Downside - many key expenses are excluded and French labour social security costs remain one of the most expensive in Europe.

The above ‘soft money’ incentives also work very well in combination of each other on a single production (e.g. CAN/IRE or CAN/SA).”

See Televisual’s April edition for full details.

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