PKF’s business advisers have enjoyed the challenge of managing the taxation compliance and other associated reporting obligations of our diverse portfolio of local and international film and television clients. Approaching complex tax filings such as preparing financial statements, income tax returns and business activity statement filings can be quite daunting for filmmakers – especially those who may be new to the industry and are producing their first project.
Engaging a competent business advisor is an absolute essential for all producers and directors, whether their production is a small locally produced feature film, or a large scale blockbuster production. Navigating a sea of unfamiliar terms such as tax offsets, rebates, fringe benefits tax and withholding tax are made easy when you have the right advisors on your side.
Producers need to be aware that part of the film making journey includes remaining up to date and compliant with their reporting, filing and other business obligations. The consequences of untimely or incorrect filings can attract penalties, interest or further compliance action from the ATO and other regulatory bodies. PKF’s business advisors assist many producers with meeting their tax compliance and reporting duties.
Some common pitfalls (for small productions particularly) include:
- Inadequate bookkeeping which can lead to range of GST and taxation issues, resulting in costly accounting fees at the end of the year to rectify any errors.
- New producers are often unaware of how to correctly establish their business structures in the most tax effective manner. While some smaller productions are more of a ‘love project’ in nature, as opposed to other productions which have a profit-making intention, it’s important to have a conversation with your advisor so that you can realise the benefit of your production in the most tax effective way.
- It’s imperative for producers to thoroughly understand their funding and production agreements. Engaging an experienced advisor to assist producers with understanding their rights and obligations with respect to these types of agreements is crucial.
- Some of the federal government incentives that are available to producers are received up-front, over the life of the production, or post productionafter a tax return is lodged. Producers need an advisor that can act quickly and efficiently to ensure any financial assistance is attained as quickly as possible.
The right advice and peace of mind that comes with knowing your taxation and reporting is under control allows producers and film makers to focus on what they do best, create great films. PKF’s business advisors have hands-on experience in the film and television space and can assist with any and all aspects of the taxation requirements of producers and Film makers, no matter whether you are a small feature film producer, or a large-scale international blockbuster.
Written by PKF Gold Coast Senior Accountant Michael Cowan (pictured).