NZSPG Criteria New Zealand 1 August 2015

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1 August 2015

This document sets out the eligibility criteria for the New Zealand Screen Production Grant for New Zealand Productions and outlines the application process.

These criteria are subject to change from time to time. Before submitting an application applicants should check with the New Zealand Film Commission to make sure they are using the correct version of the criteria and the correct application form.

The online version of the NZSPG Criteria contains FAQs marked by a question mark icon. It is important that you read the NZSPG Criteria for New Zealand Productions dated 1 August 2015 before reading these FAQs. If there are any conflicts between these FAQs and the Criteria, the Criteria will always prevail. These FAQs are intended to help you interpret the Criteria only and are non-binding. Accordingly the New Zealand Film Commission (NZFC) does not accept any responsibility for errors or misstatements in these FAQs.

Section 1 - Introduction

  • 1. Introduction

    Effective from 1 April 2014, the New Zealand Government introduced the New Zealand Screen Production Grant scheme. This scheme enhances and combines the Large Budget Screen Production Grant scheme and the Screen Production Incentive Fund. There are two sets of criteria – the NZSPG Criteria for International Productions and the NZSPG Criteria for New Zealand Productions.

    These criteria are the NZSPG Criteria for New Zealand Productions and apply only to productions with significant New Zealand content (New Zealand Productions). Significant New Zealand content is defined in Section 18 of the New Zealand Film Commission Act 1978, and, for the purposes of these criteria, will be determined in accordance with the Significant New Zealand Content Guidelines in Appendix 3.

    A visual overview of the eligibility criteria for the New Zealand Grant is provided at the end of this Section.

    Productions that do not have significant New Zealand content should refer to the NZSPG Criteria for International Productions to see whether they are eligible for an International Grant under those criteria.

  • 2. Key Definitions

    In these criteria the following terms or symbols have the meaning set out below. Further definitions of other terms used in these criteria are in Appendix 1. If a word or phrase is capitalised it is defined below or in Appendix 1.

    $ means New Zealand dollars.

    Additional Grant refers to the grant available to eligible New Zealand Productions that meet the additional criteria in Section 3.

    IRD means the New Zealand Department of Inland Revenue.

    New Zealand Grant refers to the grant available under the NZSPG to New Zealand Productions only.

    NZFC means the New Zealand Film Commission.

    NZSPG means the New Zealand Screen Production Grant scheme introduced by the New Zealand Government from 1 April 2014.

    QNZPE means Qualifying New Zealand Production Expenditure as defined in Section 4.

    TPE means Total Production Expenditure as defined in Appendix 2.

  • 3. Purpose

    The New Zealand Grant is focused on industry development and cultural outcomes. The purpose of the New Zealand Grant is twofold:

    • to build the sustainability, scale and critical mass of the domestic industry, and support the development of New Zealand creatives
    • to provide cultural benefits to New Zealand by supporting the creation of New Zealand content and stories.

    It is anticipated that only experienced producers will apply for a New Zealand Grant. As a consequence of this, it is expected that applications will be prepared to a high standard and in accordance with both the letter and intent of these criteria. Applications that do not meet these standards or that technically meet the criteria but that, in the NZSPG Panel’s opinion, are structured in a way that is inconsistent with the intent of the criteria, may be rejected by the NZSPG Panel at their sole discretion.

  • 4. Amount of the New Zealand Grant

    The New Zealand Grant is 40% of QNZPE. The New Zealand Grant is capped at $6 million per production unless the production qualifies for an Additional Grant.

    The Additional Grant is 40% of QNZPE from $15 million to $50 million. The Additional Grant is capped at $14 million.

    The total maximum New Zealand Grant is $20 million.

    FAQ: Is the amount of money available in the NZSPG fund capped?

    Is the amount of money available in the NZSPG fund capped?

    No, the pool of government funding available is not capped, but this should not be confused with the cap that applies to individual productions, as detailed under Clause 4.

  • 5. Effective Date, Transitional Provisions and Historical Costs

    Effective Date
    These criteria are effective from 1 August 2015.

    Transitional Provisions
    New Zealand Productions that have started Principal Photography before 1 August 2015 will be assessed under the NZSPG Criteria for New Zealand Productions dated 1 April 2014.

    New Zealand Productions that start Principal Photography on or after 1 August 2015 will be assessed under these criteria.

    The New Zealand Grant for any QNZPE on a television or other non-feature film production relating to goods or services provided before 1 April 2014 will be paid at the rate of 20%.

    These criteria have stricter requirements for television and non-feature film productions than the criteria dated 1 April 2014 and therefore transitional arrangements may apply in the following circumstances.

    • The applicant applies to the NZFC before 1 February 2016 to have the production considered under the 1 April 2014 criteria;
    • As at 1 August 2015 the production the subject of the application has been fully financed based on the 1 April 2014 criteria; and
    • The production has not started Principal Photography by 1 August 2015.

    The applicant must provide evidence of the stage of financing as at 1 August 2015, the reason Principal Photography has not commenced by 1 July 2015 and the reason the applicant wants the production to be considered under the 1 April 2014 criteria. The decision of the NZSPG Panel will be at its sole discretion and made on a case-by-case basis.

    Historical Costs
    Any production that started Principal Photography prior to 1 July 2008 is not eligible for a New Zealand Grant. QNZPE only includes expenditure incurred on or after 1 July 2008, regardless of when any contractual obligation to undertake the expenditure was undertaken.

    In general, costs paid more than ten years prior to the start of Principal Photography cannot be claimed as QNZPE. If an applicant wishes to claim costs paid more than ten years prior to the start of Principal Photography, they must apply for provisional certification and the NZSPG Panel will determine, at their sole discretion and on a case-by-case basis whether there are exceptional circumstances to allow these costs to be claimed as QNZPE.

  • 6. Eligibility for New Zealand Grant

    To be eligible for a New Zealand Grant, productions and applicants must satisfy:

    1. (a)the relevant specific eligibility criteria in Section 2A; and
    2. (b)the general eligibility criteria in Section 2B.

    To be eligible for an Additional Grant, productions and applicants must satisfy:

    1. (a)the relevant specific eligibility criteria in Section 2A;
    2. (b)the general eligibility criteria in Section 2B; and
    3. (c)the additional criteria in Section 3.

    FAQ: What is a New Zealand Production?

    What is a New Zealand Production?

    A production which has ‘Significant New Zealand Content’ as determined in accordance with the Significant New Zealand Content Guidelines (incorporating a points test) in Appendix 3 of the Criteria. All productions must achieve a minimum of 20 points to qualify as having significant New Zealand content.

Visual Overview of the New Zealand Grant

  • Visual Overview of the New Zealand Grant

Section 2a - Specific Eligibility Criteria

  • 7. Feature Films

    7.1Format

    1. (a)A feature film is a production that is not excluded under clause 7.1(b) and is:
      1. (i)commonly screened as the main attraction in commercial cinemas;
      2. (ii)not less than 60 minutes, or in the case of a large format (IMAX) film not less than 40 minutes;
      3. (iii)recorded, subtitled or dubbed in one of New Zealand’s official languages; and

        is shot and processed to commercial release standards primarily for exhibition to the public in cinemas. Feature length content that is not intended primarily for exhibition to the public in cinemas, e.g. telefeatures or home entertainment releases, may be eligible if they meet the requirements of clause 8.1

    2. (b)A production that fits into any of the following categories (or to a substantial extent fits into the following categories) is specifically excluded from eligibility:
      1. (i)an advertising programme or commercial;
      2. (ii)a discussion programme, current affairs, news, a panel programme, or a programme of a like nature;
      3. (iii)pornography;
      4. (iv)a training programme;
      5. (v)an interactive digital game (other than transmedia content as per clause 17.2(b)(iv)); or
      6. (vi)a production of a public event, including a sports event.

    7.2Expenditure threshold

    A feature film must have QNZPE of $2.5 million or more.

    For Official Co-productions, the expenditure threshold is TPE of $2.5 million or more.

    FAQ: What is TPE?

    What is TPE?

    TPE (Total Production Expenditure) is only relevant if your production is an official co-production between New Zealand and another country or countries, and you are using TPE to calculate the expenditure threshold or the business overheads cap.
    TPE is defined in Appendix 2 of the Criteria. It is essentially the total production budget (worldwide) less certain excluded costs.

    7.3Significant New Zealand content

    A feature film must achieve 20 points or more (including the minimum points required in sections A and C) in the Significant New Zealand Content Test.

    An Official Co-production will be deemed to have significant New Zealand content for the purposes of the New Zealand Grant.

    7.4New Zealand distribution

    A feature film must have secure confirmed commercial cinematic distribution in New Zealand, as evidenced by a genuine, legally binding deal memo or distribution agreement.

    This means there must be a genuine intention from a recognised distributor (evidenced by a deal memo or agreement that is on normal commercial terms) to release the film as the main attraction in cinemas in New Zealand where an admission fee is charged. This does not include a contrived arrangement for release on a single occasion, for an unacceptably short period of time, or other non-commercial basis. It excludes test screenings, free or charitable screenings, and film festival screenings (as such terms are commonly understood in the New Zealand screen production industry). The applicant may be required to prove that the distribution is commercially robust. In general, it is expected that the extent of the New Zealand distribution will be commensurate with the expected amount of the New Zealand Grant.

    If, after the NZFC has confirmed that this requirement has been satisfied, the feature film does not receive a New Zealand theatrical release, then unless there is evidence that the intention to distribute theatrically was not genuine, the film will still be considered to have satisfied this requirement.

    Applicants with feature films that are Official Co-productions with a minority share being contributed by the New Zealand co-producer may seek approval from the NZSPG Panel for film festival distribution as sufficient commercial distribution in New Zealand, such approval to be given solely at the NZSPG Panel’s discretion.

    FAQ: The Criteria states that distribution must be “commensurate with the expected amount of the New Zealand Grant” – what does this mean?

    The Criteria states that distribution must be “commensurate with the expected amount of the New Zealand Grant” – what does this mean?

    This sentence within clause 7.4 of the Criteria (“..the distribution must be commensurate with the expected value of the NZ Grant”) is a recent amendment to the Criteria. It is intended to reinforce the requirement that there be genuine commercial distribution of the production in New Zealand. The NZSPG Panel will continue to consider all applications on a case-by-case basis in this regard and will need to be satisfied that the production will be shown to the public in New Zealand and that it has a distribution deal that is in line with, and of a scale expected in the industry for the type and cost of the production. For example, a relatively low budget arthouse feature (perhaps a minority co-production with English sub-titles) would not be expected to have the same scale of distribution as a larger budget feature more suited to exhibition in mainstream cinemas.

    FAQ: Can I apply for a provisional certificate without a distribution agreement?

    Can I apply for a provisional certificate without a distribution agreement?

    Evidence of distribution is required to obtain a provisional certificate. If you don’t have a signed deal memo or distribution agreement at the time you lodge your provisional application, then you can request the NZFC to approve a draft version. In which case, your provisional certificate will state that provided you enter into a legally binding deal memo/distribution agreement (as the case may be) on the terms submitted with your application, then you will meet the distribution requirements in the criteria.

    FAQ: Can I distribute a feature film myself?

    Can I distribute a feature film myself?

    As per Clause 7.4, the Criteria requires that by time of final certification, the production must have secured a legally binding distribution agreement (or deal memo) with a recognised distributor to release the film commercially as the main attraction in New Zealand cinemas. It is expected that the applicant provide evidence that the release will be of a ‘certain scale’ to a paying audience. In most cases an application for self-distribution is likely to be declined.

    If you have evidence of successful self-distribution in New Zealand, the NZSPG Panel will assess proposed distribution arrangements on a case-by-case basis. Self-distribution will only be accepted if the NZSPG Panel is confident that the scale and outcome of the cinematic release will meet the intention of the Criteria.

    7.5Non-New Zealand government funding threshold

    The proportion of non-New Zealand government production funding for a feature film must be 10% of the production budget or higher. See Appendix 1 for the definition of New Zealand government production funding.

    To satisfy this requirement, there must be either:

    1. (a)A genuine intention from one or more non-New Zealand government entities or persons who have sufficient resources to fund, in aggregate, 10% or more of the production budget evidenced by a signed letter of offer, deal memo or funding agreement; or
    2. (b)a written offer of funding from a New Zealand government entity (or entities) that makes that funding conditional on 10% or more of the production budget being provided by non-New Zealand government entities.

    The production budget must include all above-the-line and below-the-line items usually included in production budgets for similar productions in New Zealand plus a reasonable contingency.

    If, after the NZFC has confirmed that this requirement has been satisfied, the circumstances of the production change and the proportion of non-New Zealand government production funding drops below 10%, then unless there is evidence that the intention to fund was not genuine, the production will still be considered to have satisfied this requirement.

    FAQ: Do I need to meet the required level of non-New Zealand Government funding at provisional application stage?

    Do I need to meet the required level of non-New Zealand Government funding at provisional application stage?

    No, however, if you want the provisional certificate to state that this requirement has been satisfied (the lender cashflowing your Grant may require this) then you will need to provide evidence that this has been satisfied at provisional application stage.

    If you do not provide this evidence at provisional application stage then your provisional certificate will state: “Provided the proportion of non-New Zealand Government funding is 10%/25% (depending on format) or more of the production budget, then you will meet the non-New Zealand Government funding threshold requirement.”

    7.6Other New Zealand government funding

    A feature film may receive production funding (or any other funding in relation to the production) from a New Zealand government agency (including, for example, funding through NZFC, NZ On Air or Te Māngai Pāho) and a New Zealand Grant.

    FAQ: Can I access other New Zealand screen incentives if I apply for a NZSPG for New Zealand Productions?

    Can I access other New Zealand screen incentives if I apply for a NZSPG for New Zealand Productions?

    A production may not receive a New Zealand Grant and an International Grant.

    A production may only receive other New Zealand government production funding if the production is an eligible feature film, an animated production or a children’s television drama.

    All productions may receive New Zealand government development funding or other non-production funding and a Grant.

  • 8. Television and Other Non-feature Films

    8.1Format

    1. (a)A television or other non-feature film is a production that is not excluded under clause 8.1(b), is recorded, subtitled or dubbed in one of New Zealand’s official languages, and is either:
      1. (i)a single episode programme (including a telefeature or feature length content that is not primarily intended for exhibition to the public in cinemas) of at least one commercial half-hour in length whether scripted or unscripted including but not limited to drama, documentary, factual, reality, children’s and animation;
      2. (ii)a series or season of a series whether scripted or unscripted including but not limited to drama, documentary, factual, reality, children’s and animation being a programme with a common theme or themes consisting of at least two episodes that are intended for release together in a national market or markets. Each episode (with the exception of animation) must be a least one commercial half-hour in length; or
      3. (iii)a short form animation which is a production that predominantly uses cell, stop motion, digital or other animation and where the total duration of all episodes is not less than one commercial quarter-hour; and
      4. is shot and processed to commercial technical distribution standards and intended to be released on a distribution platform other than cinema. istribution platforms include all forms of television, DVD/Blu-ray, internet, video-on-demand, mobile phone or any other public mass distribution medium device.
    2. (b)A production that fits into any of the following categories (or to a substantial extent fits into the following categories) is specifically excluded from eligibility:
      1. (i)an advertising programme or commercial;
      2. (ii)a discussion programme, current affairs, news, a panel programme, or a programme of a like nature;
      3. (iii)pornography;
      4. (iv)a training programme;
      5. (v)an interactive digital game (other than transmedia content as per clause 17.2(b)(iv));
      6. (vi)a production of a public event, including a sports event; or
      7. (vii)a programme based on a format (as that term is commonly known in the screen industry) other than formats developed in New Zealand for initial distribution in New Zealand.

    8.2Expenditure thresholds

    Specific Format Minimum QNZPE
    Single episode programme - scripted $1 million total &
    No less than $800,000 per hour
    Single episode programme - unscripted $250,000 total
    Series of programmes - scripted $1 million total &
    No less than $500,000 per hour
    Series of programmes - unscripted No less than $250,000 per hour
    Short form animation - single episode or series $250,000 total &
    No less than $400,000 per hour

    Expenditure per hour is determined using the following formula: total QNZPE/duration of production in hours

    Where:

    1. (a)duration of production in hours means the total length of the production measured in hours; and
    2. (b)total QNZPE means the total of the applicant’s QNZPE on the production.

    For Official Co-productions, the relevant expenditure threshold is calculated by reference to TPE instead of QNZPE.

    8.3Significant New Zealand content

    A television or other non-feature film production must achieve 20 points or more (including the minimum points required in sections A and C) in the Significant New Zealand Content Test.

    An Official Co-production will be deemed to have significant New Zealand content for the purposes of the New Zealand Grant.

    8.4New Zealand distribution

    A television or other non-feature film production must have a commercial agreement for distribution on an appropriate platform, whereby access to the production is available in New Zealand. This must not be a contrived arrangement for the purposes of meeting these criteria.

    Examples include New Zealand television broadcast (including free-to-air or pay television), commercial distribution on DVD/Blu-ray in New Zealand, or commercial distribution of the production via a new media platform (such as online or mobile content) accessible to New Zealand residents. In general, it is expected that the extent of the New Zealand distribution will be commensurate with the expected amount of the New Zealand Grant.

    If, after the NZFC has confirmed that this requirement has been satisfied, the production does not obtain a commercial release in New Zealand, then unless there is evidence that the intention to commercially distribute was not genuine, the production will still be considered to have satisfied this requirement.

    FAQ: The Criteria states that distribution must be “commensurate with the expected amount of the New Zealand Grant” – what does this mean?

    The Criteria states that distribution must be “commensurate with the expected amount of the New Zealand Grant” – what does this mean?

    This sentence within clause 8.4 of the Criteria (“..the distribution must be commensurate with the expected value of the NZ Grant”) is a recent amendment to the Criteria. It is intended to reinforce the requirement that there be genuine commercial distribution of the production in New Zealand. The NZSPG Panel will continue to consider all applications on a case-by-case basis in this regard and will need to be satisfied that the production will be shown to the public in New Zealand and that it has a distribution deal that is in line with, and of a scale expected in the industry for the type and cost of the production. For example, a relatively low budget arthouse feature (perhaps a minority co-production with English sub-titles) would not be expected to have the same scale of distribution as a larger budget feature more suited to exhibition in mainstream cinemas.

    FAQ: What are acceptable distribution platforms for non-feature film productions?

    What are acceptable distribution platforms for non-feature film productions?

    Refer to Clause 8.4 of the Criteria

    Acceptable New Zealand distribution platforms include New Zealand television broadcast (free-to-air or Pay TV); commercial distribution on DVD/Blue-ray; or commercial distribution via new media platform accessible to New Zealand residents, such as on-line or mobile content. In all cases, the applicant must provide a genuine, legally binding commercial distribution agreement by the time of final application.

    8.5Non-New Zealand government funding threshold and market attachments

    The proportion of non-New Zealand government production funding for a television or other non-feature film production must be 25% of the production budget or higher.

    To satisfy this requirement, there must be either:

    1. (a)A genuine intention from one or more non-New Zealand government entities or persons who have sufficient resources to fund, in aggregate, 25% or more of the production budget evidenced by a signed letter of offer, deal memo or funding agreement; or
    2. (b)a written offer of funding from a New Zealand government entity (or entities) that makes that funding conditional on 25% or more of the production budget being provided by non-New Zealand government entities.

    The production budget must include all above-the-line and below-the-line items usually included in production budgets for similar productions in New Zealand plus a reasonable contingency.

    If, after the NZFC has confirmed that this requirement has been satisfied, the circumstances of the production change and the proportion of non-New Zealand government production funding drops below 25%, then unless there is evidence that the intention to fund was not genuine, the production will still be considered to have satisfied this requirement.

    The production must have market attachments that comprise 10% or more of the production budget.

    ‘Market attachments’ are limited to international sales advances, distribution advances and licence fees, and other financing where the financier is not entitled to share in the net receipts from the production. Any market attachments must be from parties unrelated to the applicant and from bona fide sales agents, distributors, broadcasters etc.

    The production budget must include all above-the-line and below-the-line items usually included in production budgets for similar productions in New Zealand plus a reasonable contingency.

    FAQ: Do I need to meet the required level of non-New Zealand Government funding at provisional application stage?

    Do I need to meet the required level of non-New Zealand Government funding at provisional application stage?

    No, however, if you want the provisional certificate to state that this requirement has been satisfied (the lender cashflowing your Grant may require this) then you will need to provide evidence that this has been satisfied at provisional application stage.
    If you do not provide this evidence at provisional application stage then your provisional certificate will state: “Provided the proportion of non-New Zealand Government funding is 10%/25% (depending on format) or more of the production budget, then you will meet the non-New Zealand Government funding threshold requirement.”

    FAQ: Does a TVNZ Licence Fee qualify as non-government funding?

    Does a TVNZ Licence Fee qualify as non-government funding?

    Yes. TVNZ is a commercial broadcaster and therefore its licence fee is non-New Zealand Government funding.

    FAQ: What are counted as ‘market attachments’ for the purpose of assessing the 10% market attachment threshold required for TV and other non-feature film productions?

    What are counted as ‘market attachments’ for the purpose of assessing the 10% market attachment threshold required for TV and other non-feature film productions?

    Market attachments are sales advances, distribution advances and licence fees that are payable in exchange for certain rights to screen the production. Market attachments may also include other types of market funding where the financier is not entitled to share in the net receipts from the production. Where a broadcaster commissions and funds all or a substantial part of a production, then the NZFC will review the principal funding and distribution agreements to assess what proportion of the funding is a market attachment as opposed to equity or other types of funding.

    8.6Other New Zealand government funding

    A television or other non-feature film production may NOT receive production funding (but may receive development or other non-production funding) from a New Zealand government screen agency (including for example funding through NZFC, NZ On Air or Te Māngai Pāho) and a New Zealand Grant, unless it is an animated production or a children’s drama production in which case it may receive both. Children’s drama productions are scripted programmes made specifically for children or groups of children (industry-standard definitions will be applied).

    FAQ: Can I access other New Zealand screen incentives if I apply for a NZSPG for New Zealand Productions?

    Can I access other New Zealand screen incentives if I apply for a NZSPG for New Zealand Productions?

    A production may not receive a New Zealand Grant and an International Grant.

    A production may only receive other New Zealand government production funding if the production is an eligible feature film, an animated production or a children’s television drama.

    All productions may receive New Zealand government development funding or other non-production funding and a Grant.

    The expenditure thresholds for a television and other non-feature film production are lower than those required for a feature film. The NZSPG Panel will reject any applications where it is suspected that a feature film is applying as a television or other non-feature film production.

Section 2b - General Eligibility Criteria

  • 9. Special Purpose Vehicle

    9.1Applicant to be SPV

    An applicant must be a special purpose vehicle (SPV) established principally in relation to making the production. The applicant must have it’s own GST and payroll registration numbers and its own bank account. If the applicant is part of a group of companies, then the applicant’s GST and payroll returns must not be grouped with any other company within that group for tax purposes. The requirement for separate GST registration is conditional on Inland Revenue accepting that the relevant production is eligible to be registered as a separate registered person under section 56(2) of the Goods and Services Tax Act 1985.

    9.2Exceptions

    1. An applicant is not required to be a SPV where:
    2. (a)Series: the production is a series or a season of a series. In this case a new SPV is not required for each series or season of the production and the applicant’s existing GST and payroll registration numbers and bank account may be re-used for the new series or season, provided that there is no overlap in QNZPE to be claimed on each series or season. It is expected that all GST and payroll returns from the start of the new series or season will predominantly include expenditure relating to that series or season. Minor expenditure relating to other series or seasons may be included in those returns but this expenditure must be clearly identified and excluded from QNZPE. If there is overlap in QNZPE to be claimed on each series or season then a new SPV is not required for each series or season and the applicant’s existing GST and payroll registration numbers and bank account may be re-used for each production provided that separate tax locations* and a separate bank account must be used for each series or season; or
    3. (b)Repurposing (non-concurrent use): the applicant has incurred all QNZPE to be claimed on a previous production and/or has applied for a New Zealand Grant (or a SPIF, LBSPG or PDV grant) for that previous production. In this case, the applicant’s existing GST and payroll registration numbers and bank account may be re-used for the new production. It is expected that all GST and payroll returns from the start of the new production will predominantly include expenditure relating to that production. Minor expenditure relating to the previous production may be included in those returns but this expenditure must be clearly identified and excluded from QNZPE.
    4.  *An applicant must contact the IRD for information on the steps required to obtain a separate tax location number for an individual production. This number is a separate identifier within the applicant’s principal GST and payroll registration number and enables the applicant to submit separate GST and payroll returns under that number without having to set up a separate entity.
  • 10. Residency Status

    10.1Residency of applicant

    An applicant must be either:

    1. (a)a New Zealand resident company, which in this context means that the company:
      1. (i)is incorporated in New Zealand; and
      2. (ii)carries on business in New Zealand; and
      3. (iii)has either its central management or control in New Zealand, or its voting power controlled by shareholders who are residents of New Zealand (or, in the case of individual shareholders, who are citizens or residents of New Zealand); or
    2. (b)a New Zealand resident partnership (a partnership is a New Zealand resident if a majority of the partners in the partnership are New Zealand Tax Residents).

      FAQ: Why are the residency requirements for the applicant tougher than in the criteria for International Productions?

      Why are the residency requirements for the applicant tougher than in the criteria for International Productions?

      One of the key purposes of the New Zealand Grant is to enable New Zealand producers and production companies to develop their businesses. As such, the New Zealand Government expects that the primary beneficiary of the New Zealand Grant will be a New Zealand-based producer or production company. See Clauses 10.1 and 10.2 of the Criteria.

    10.2Majority owner

    Where the applicant is majority-owned by another company, the majority owner must also meet the criteria in clause 10.1.

  • 11. Responsible Entity

    An applicant must be the entity responsible for carrying out, or making the arrangements for carrying out, all activities involved in making the production in New Zealand, and must have access to full financial information for the production worldwide, that can be provided to the NZFC upon request. For Official Co-productions, if the expenditure thresholds and business overhead cap for the production are met by QNZPE alone, then the requirement for access to the other co-producer’s financial information is waived, unless that financial information relates to QNZPE.

    Only one entity per production is eligible for the New Zealand Grant.

    Broadcasters are eligible for the New Zealand Grant, but where a production is made by an independent production entity the producer will be eligible for the New Zealand Grant, not the broadcaster.

    For the purpose of this clause, ‘making the production’ means doing all things necessary to complete the production, and includes (but is not limited to):

    1. (a)Pre-production activities in relation to the production;
    2. (b)Production activities in relation to the production;
    3. (c)Post-production activities in relation to the production; and
    4. (d)Any other activities undertaken to bring the production up to the state where it could reasonably be regarded as ready to be distributed, roadcast or exhibited to the general public.
  • 12. Other Grants

    A production cannot receive a New Zealand Grant (including an Additional Grant) and an International Grant.

  • 13. Recoupment

    The applicant (or its parent company if it is a majority-owned subsidiary) must be entitled to receive a share of the net receipts from the production that is generally commensurate with the expected value of the New Zealand Grant. The position for the recoupment of such share of net receipts shall be generally similar to that of any other equity investors in the production.

    Income earned by producers from successful productions helps create a sustainable New Zealand screen production industry. Therefore, the New Zealand government expects that all New Zealand Grant recipients will have an equity share in the production so that they may reinvest in the New Zealand screen sector.

    FAQ: Can I agree to give some of the Producer NZSPG equity to another entity?

    Can I agree to give some of the Producer NZSPG equity to another entity?

    The applicant (or its parent company) must retain the right to receive a share of net receipts from the production of similar value to the Grant (often referred to as the NZSPG equity). This should be recoupable in a similar position to other equity investors. For example, if the NZSPG equity is 20% of the total budget, we would expect the producer to have a recoupment position that is equal with other investors in the film i.e. in 2nd or 3rd position, retaining 20% of the net receipts. However, the disbursement of net receipts for all projects is different and there are different models for film and TV and for co-productions. Please speak with the NZFC if you require further clarification. Applicants who wish to assign part of this right to third parties (other than cast or crew) should discuss this with the NZFC in advance to ensure compliance with this requirement. See Clause 13 of the Criteria.

Section 3 - Additional Grant

  • 14. Additional Criteria

    14.1QNZPE Threshold

    The production must have QNZPE of $15 million or more.

    Official Co-productions must also have QNZPE of $15 million or more. TPE may not be used for this threshold as the Additional Grant is only payable on QNZPE over $15 million.

    FAQ: Do I qualify for a Grant on QNZPE over $15 million?

    Do I qualify for a Grant on QNZPE over $15 million?

    The NZSPG for New Zealand Productions is 40% of QNZPE up to $15 million. The total Grant is capped at $6 million per production. However, if the production has QNZPE of more than $15 million, then subject to the requirements of Section 3 of the Criteria, an applicant can apply for an additional Grant to be paid on any QNZPE expenditure over $15 million. Official Co-productions will also require QNZPE of more than $15 million to apply for an Additional Grant. TPE will not be used for the threshold for the Additional Grant.

    To qualify for an Additional Grant, the level of Producer experience will be taken into account by the Panel; market attachment of at least 10% will be required; and the applicant must provide the NZFC with a 50% Equity Share in the amount of Grant that is over-and-above QNZPE of $15 million threshold. Evidence of legally binding agreements will be required at Final Certification to confirm compliance with the specific criteria required to lever the Additional Grant. Full details are set-out under Section 3 of the NZSPG Criteria.

    FAQ: Is the Additional Grant capped?

    Is the Additional Grant capped?

    The Additional Grant is capped at $14 million (40% of additional QNZPE spend of $35 million). The total maximum New Zealand Grant is $20 million.

    14.2Producer experience

    Feature films: The producer must have produced at least one feature film that has been released theatrically in New Zealand or overseas.

    TV: The producer must have produced at least one production that has been broadcast on a major TV network in New Zealand or overseas.

    Other formats: The producer must have produced a production of a similar genre or scale that has been exploited commercially.

    ‘Producer’ in this context means, in relation to the production applying for the New Zealand Grant, the lead individual producer, or in the case of an Official Co-production, the lead individual New Zealand producer.

    14.3Market attachment

    The production must have market attachments that comprise 10% or more of the production budget.

    ‘Market attachments’ are limited to international sales advances, distribution advances and licence fees (other than for New Zealand only), and other financing where the financier is not entitled to share in the net receipts from the production. Any market attachments must be from parties unrelated to the applicant and from bona fide sales agents, distributors, broadcasters etc.

    The production budget must include all above-the-line and below-the-line items usually included in production budgets for similar productions in New Zealand plus a reasonable contingency.

  • 15 Share of Net Receipts (including profit)

    15.1NZFC Equity Share

    In return for an Additional Grant an applicant must provide the NZFC with a share of net receipts (including profit) from the production. This share shall be equivalent to 50% of the equity share in the production attributable to the value of the Additional Grant (the NZFC Equity Share). Clause 13 applies to the remaining 50% equity attributable to the Additional Grant as well as the equity attributable to the New Zealand Grant up to $15 million.

    Generally, the NZFC Equity Share will be the proportion that the amount of the Additional Grant bears to the total amount of equity invested in the production. Equity does not generally include licence fees, gap funding, production loans, distribution or sales advances or other financing where the financier is not entitled to share in the net receipts from the production. In relation to profit only, the NZFC Equity Share may be reduced pro rata with other equity investors to allow for any agreed share of profit to be allocated to the applicant and/or any other producer.

    A simple example of the calculation of the NZFC Equity Share is set out below.

    Applicants are strongly advised to engage with the NZFC during the financing of the production to ensure that the NZFC agrees with the applicant’s calculations of the NZFC Equity Share.

    The recoupment and profit position of the NZFC Equity Share must not be inferior to the applicant’s recoupment and profit position for its equity share attributable to the balance of the New Zealand Grant.

    The NZFC will reinvest all income it receives from the NZFC Equity Share in the New Zealand screen industry.

    Simple example:

    Production Budget: $25,000,000
    financed by:  
    Additional Grant 4,000,000
    Balance of Grant 6,000,000
    Distribution advances 5,000,000
    Other equity 10,000,000

    Total equity is $20,000,000 (being the production budget less the distribution advances)

    The equity share attributable to the Additional Grant is 20% (being 4,000,000/20,000,000); therefore the NZFC Equity Share is 10%. Where the producer is allocated 50% of the net profits from the production, the NZFC’s share of the total net profits would be 5% (provided the other equity investors’ profit share is also reduced pro rata).

    15.2Final application for Additional Grant

    The final application for an Additional Grant must include evidence that binding legal agreements (the form and substance of which are subject to the NZFC’s approval) are in place, or will be put in place after approval by the NZFC, for the collection and disbursement of net receipts (including profit) from the production including the disbursement of the NZFC Equity Share.

    Additional Grants are paid after Completion of the production and upon approval of the final application by the NZSPG Panel.

    15.3Interpretation

    For the purposes of this clause 15 net receipts shall be deemed to have the meaning given to that term (or any similar term such as ‘Net Proceeds’ or ‘Net Income or ‘Adjusted Gross Proceeds’) in the primary financing and distribution agreements for the production provided that it shall not be defined less favourably for the NZFC and the applicant than for any other net receipts participant.

    For the avoidance of doubt, the NZFC’s entitlement to net receipts from the production subsists in perpetuity and is not limited to recoupment of the amount of the Additional Grant.

Section 4 - Qualifying New Zealand Production Expenditure (QNZPE)

  • 16. Expenditure Statement

    All costs claimed as QNZPE must be presented in an audited expenditure statement attached to the final application. The audited expenditure statement must be in New Zealand dollars with all foreign currency converted as per clause 19. Arrangements should be made to track expenditure that relates to QNZPE and non-QNZPE as early as possible. Where necessary, invoices from any supplier should be broken down to show New Zealand and non-New Zealand activity with computerised accounts formatted to show this split. This will also facilitate the independent audit of the expenditure statements. You should familiarise yourself with the requirements of the final application form as early as possible.

    FAQ: Do I have to use a particular accounting system?

    Do I have to use a particular accounting system?

    No, but your accounting system should be one that is recognised and commonly used for production accounting. It needs to be set up in such a way to enable you to track and code all items of expenditure with reference to QNZPE, non-QNZPE and for official co-productions only, TPE and exclusions from TPE.

  • 17. QNZPE

    17.1General QNZPE definition

    QNZPE is expenditure spent by the applicant on the production, where that expenditure is incurred on, or is attributable to:

    1. (a)goods and services provided in New Zealand; or
    2. (b)the use of land located in New Zealand; or
    3. (c)the use of a good that is located in New Zealand at the time that the good is used in the making of the production; or
    4. (d)the specific inclusions set out in clause 17.2,

    but not including the expenditure set out in clause 17.3.

    17.2Specific inclusions

    1. (a) New Zealand Copyright Acquisition

      The cost if deductible under the Income Tax Act 2007, or the depreciation, if allowable under the Income Tax Act 2007, of acquiring copyright or the licensing of copyright in a pre-existing work for use in the production is QNZPE if the original owner of copyright in the pre-existing work is, or was, a New Zealand Tax Resident.

      The cost, if deductible under the Income Tax Act 2007, or the depreciation, if allowable under the Income Tax Act 2007, of commissioning and purchasing copyright (or an interest in copyright) in a work created for use in the production is QNZPE if the work is, or was, created in New Zealand.

      FAQ: Can I claim the cost of licences for New Zealand music if the cost is paid to an offshore record company?

      Can I claim the cost of licences for New Zealand music if the cost is paid to an offshore record company?

      Yes, if the original owner of the copyright is a person or company who is, or was, resident in New Zealand for tax purposes*. It is common for an offshore record company to own the copyright in a sound recording, however, if the performer or composer is a New Zealand tax resident then they will be deemed to be the original owner of copyright. Therefore, licence fees payable to offshore record companies can be treated as QNZPE if the original owner of the copyright meets the requirements of Clause 17.2(a) of the Criteria.
      *For further information on New Zealand tax residency, please refer to the IRD’s website: http://www.ird.govt.nz/international/residency/

      FAQ: Is the cost of a software licence QNZPE?

      Is the cost of a software licence QNZPE?

      This is treated in the same way as the acquisition of other intellectual property (e.g. music licences). Therefore, if the underlying software was created in New Zealand, the costs can be claimed.

    2. (b) Additional Audiovisual Content

      Costs incurred in New Zealand on audiovisual content that is intended to be released with the production in some form are QNZPE where they are incurred by the applicant prior to Completion of the production. Examples of additional audiovisual content for release with the production are:

      1. (i)director or cast commentary tracks;
      2. (ii)‘making of’ documentaries;
      3. (iii)material for extended versions;
      4. (iv)any transmedia content released on a second screen where that content is developed and produced in conjunction with the production to be viewed contemporaneously with the production and shares a unified narrative with the production.

      FAQ: Do costs relating to publicity and marketing materials qualify as QNZPE?

      Do costs relating to publicity and marketing materials qualify as QNZPE?

      Yes, but only if they are incurred in New Zealand before the completion of the production.

    3. (c)Travel to New Zealand

      The cost of each incoming journey to New Zealand undertaken for the purposes of the production is QNZPE. The cost of an incoming journey is equivalent to 100% of a one-way fare or 50% of a return fare on a commercial airline.

      The cost of both journeys is QNZPE for New Zealand Tax Residents who travel between New Zealand and another country for the purposes of the production.

    4. FAQ: If I use non-New Zealand cast and crew on the production, do their costs qualify as QNZPE?

      If I use non-New Zealand cast and crew on the production, do their costs qualify as QNZPE?

      There are different rules for cast and crew. Non-resident crew costs for the portion of their time spent working on the production in New Zealand are QNZPE provided the crew member has spent at least 14 days in total working on the production in New Zealand.

      Similarly, non-resident cast costs are QNZPE, but there are no minimum number of working days on the production required.

      Please refer to the FAQ on Apportionment to determine how to apportion costs between work in New Zealand and work in another country.

      FAQ: Can I claim the cost of a carnet as QNZPE?

      Can I claim the cost of a carnet as QNZPE?

      A carnet fee paid to a New Zealand entity (usually the Chamber of Commerce) to organise the bond amount to be deposited with Customs can be claimed as QNZPE provided it relates to goods to be used on the production. The ‘carnet bond’ itself cannot be claimed as QNZPE.

    5. (d) Production Insurance

      The cost of production insurance, including errors and omissions insurance, is QNZPE if paid to a New Zealand entity.

      FAQ: How do I treat the proceeds of an insurance claim?

      How do I treat the proceeds of an insurance claim?

      Proceeds from an insurance claim do not need to be deducted from your QNZPE. For the purposes of the NZSPG, insurance proceeds are treated the same as any other income received to finance budget overages. To the extent that you incur additional expenditure due to an ‘insurance event’, you can add this expenditure to your claim, provided it is QNZPE.

    6. (e) Completion Bonds

      Completion bond fees are QNZPE regardless of whether they are paid to an entity within New Zealand or outside New Zealand, but provided they are paid on an arm’s-length basis to a third party who is a recognised completion guarantor (as determined by the NZFC).

    7. (f) Freight

      The cost of international freight (including excess baggage) is QNZPE if paid to a New Zealand entity.

    8. (g)Principal Photography Outside New Zealand

      The fees and travel costs of New Zealand Tax Residents and the costs of the purchase of goods or services from New Zealand entities are QNZPE where:

      1. (i)the fees and travel costs relate to services provided during Principal Photography outside New Zealand or the costs relate to goods or services supplied and used during Principal Photography outside New Zealand; and
      2. (ii)the location being used for Principal Photography is reasonably required by the subject matter of the production (such as where a certain landscape or place is needed for a story).

      For the purposes of this clause 17.2(g), travel costs include commercial airfares between New Zealand and the other country, all on-the-ground travel to accommodation in the other country (e.g. airport transfers), accommodation in the other country and per diems, for the purposes of the production.

      FAQ: Can I claim on-the-ground travel costs within a foreign country for NZ resident cast and crew?

      Can I claim on-the-ground travel costs within a foreign country for NZ resident cast and crew?

      If the travel is during principal photography and meets the requirements of Clause 17.2(g) of the Criteria then on-the-ground travel costs for New Zealand tax resident cast and crew might be claimable as QNZPE. ‘On-the-ground’ travel costs only apply to travel to and from accommodation (“suitcase in hand”); commonly referred to in travel bookings as “ground transportation and/or “airport transfers”.

      Travel costs such as production vehicle hire and petrol are treated on the basis of the “suitcase-in-hand” principle, meaning that only travel costs to accommodation can be QNZPE.

      In general, on-the-ground travel costs will be assessed on a case-by-case basis. The onus is on the applicant to provide appropriate evidence to demonstrate that certain costs are QNZPE where Principal Photography is offshore.

      Travel to and from set is excluded from QNZPE.

      You may claim accommodation costs, fees and per diems for New Zealand resident cast and crew while they are providing services outside New Zealand during Principal Photography. Any costs incurred during prep days offshore are excluded from QNZPE.

      Travel costs to relocate New Zealand tax resident cast and crew between cities in an offshore location, or between foreign countries is QNZPE, provided that the travel is to and from accommodation, “suitcase-in-hand”. This is on the proviso that the locations being used for Principal Photography are reasonably required by the subject matter of the production (such as where a certain landscape or place is needed for a story).

    9. (h) Financing Expenditure

      Financing Expenditure that:

      1. (i)is paid to a New Zealand entity that provides finance for the production; or
      2. (ii)is directly related to the cashflowing of the estimated amount of the New Zealand Grant on the production and is paid to an entity resident in Australia, the United Kingdom, the Republic of Ireland, the United States of America, France or Canada, or from another country as approved by the NZFC on a case-by-case basis;
      3. is QNZPE subject, in either case, to the following caps:

      4. (iii)interest is capped at the 90-day Bank Bill Rate (as set by the Reserve Bank of New Zealand) plus 2% per annum; and
      5. (iv)financing fees (such as loan or arrangement fees and executive producer fees) are capped at 2% of the amount of the finance.

        FAQ: How do I work out what interest I can claim as QNZPE?

        How do I work out what interest I can claim as QNZPE?

        The amount of interest you can claim on loans used to finance the budget of the production is capped at the NZ Reserve Bank 90-day Bank Bill rate plus 2% per annum. For the purpose of this calculation you should use the 90-day Bank Bill Rate as set out on the Reserve Bank website (www.rbnz.govt.nz) at the date of closing the financing (this will often be the date of your Production Financing Agreement).

        FAQ: What financing costs are not QNZPE?

        What financing costs are not QNZPE?
        • Any interest that is not connected with raising, servicing or cashflowing finance for the production;
        • Any financing costs that are not paid to a New Zealand entity, unless the expenditure relates to the cashflowing of the Grant and the entity is located in an approved country;
        • Any portion of interest payments that exceed the cap; and
        • Any portion of a financing fee that exceeds the cap.

        FAQ: When are executive producer fees treated as financing fees (and therefore subject to the financing cap of 2%)?

        When are executive producer fees treated as financing fees (and therefore subject to the financing cap of 2%)?

        If an executive producer fee is payable to an investor who doesn’t actually work on the production then it is treated as if it were a financing fee and is subject to the provisions in Clause 17.2(h) of the Criteria. If the executive producer does both financing and production work, the Panel may choose to apportion the fee.

        If this doesn’t apply, then the usual rules apply to executive producer fees – note the 14-day rule and the apportionment guidelines in particular. The NZFC may require evidence of what services in New Zealand were provided by the executive producer.

    17.3Non-QNZPE

    1. (a)Costs relating to short-term visits for non-cast personnel

      The fees and per diems relating to the services of non-cast personnel who travel to New Zealand and work on the production for thirteen days or less (in total). However, costs relating to travel to New Zealand in accordance with clause 17.2(c) are QNZPE.

      FAQ: How is the 14-day rule applied to crew who work on the production?

      How is the 14-day rule applied to crew who work on the production?

      In order for their fees and expenses to be qualifying New Zealand production expenditure (QNZPE), a crew member who travels to New Zealand must work on the production for at least 14 days in total. This period includes any days off that are scheduled by the production and any paid travel days in New Zealand. For example, a 5-day shoot plus 2 days off count as 7 days.

      FAQ: If I employ a non-New Zealand writer to work on the script, will their fee qualify as QNZPE?

      If I employ a non-New Zealand writer to work on the script, will their fee qualify as QNZPE?

      Only the portion of their fee for script work actually carried out in New Zealand will qualify as QNZPE. If you employ a New Zealand writer who is based off-shore, then only the work actually carried out in New Zealand will qualify as QNZPE.

    2. (b) Acquisition or licensing of copyright

      The cost of acquiring or licensing copyright in a pre-existing work where the original owner of copyright in such work is not, or was not, a New Zealand Tax Resident and the cost of commissioning and purchasing copyright (or an interest in copyright) in a work for use in the production where the work is not, or was not, created in New Zealand.

    3. (c) Publicity and promotional costs incurred after Completion

      Publicity and promotional costs incurred after Completion of the production.

    4. (d) Additional audiovisual content incurred after Completion

      Costs incurred on additional audiovisual content after Completion of the production and/or on additional audiovisual content not intended to be released with the production.

    5. (e) Advances

      Recoverable advance payments in respect of Guaranteed Deferments, Participation Payments or Residuals.

    6. (f) Financing Expenditure cap

      Financing Expenditure above the caps in clause 17.2(h)(iii) and (iv).

    7. (g) Business overheads cap

      Business overheads above 5% of the QNZPE or $500,000 whichever is the lesser.

      For Official Co-productions, TPE may be used instead of QNZPE to calculate this cap.

      FAQ: How do I calculate the cap?

      How do I calculate the cap?

      Qualifying business overheads only apply to New Zealand-based entities. Business overheads are generally accepted to mean the ongoing expenses necessary to maintain the business operation, and may not necessarily be directly attributed to the specific cost of making the production. They should be calculated using all relevant expenditure for the production. Should this equal less than 5% of the QNZPE or $500,000, the total amount of overheads can be claimed. Should they equal more than 5% of the QNZPE or $500,000, only the amount up to 5% of the QNZPE or $500,000 may be claimed, whichever is the lesser.

      The cap on New Zealand business overheads applies to the total amount claimed for the general business overheads of the applicant and any associate entities (including parent and subsidiary entities).

      Use the following steps to calculate what business overheads you can claim as QNZPE (they are capped at 5% of the budget or $500,000 whichever is lesser):
      Deduct the budgeted overhead from the total QNZPE (this is the ‘adjusted amount’). Co-productions may use TPE for this calculation.
      Divide the adjusted amount by 95% then multiply by 5%. This then represents the maximum business overhead that can be claimed as QNZPE (as long as it does not exceed $500,000). Any business overheads in excess of this amount will not qualify as QNZPE.

      If you are unsure how to calculate this cap, you can contact the Incentives Executive at the NZFC.

    8. (h) Guaranteed Deferments, Participation Payments, Residuals

      Guaranteed Deferments, Participation Payments, and Residuals.

      FAQ: Can I include accrued expenditure in QNZPE?

      Can I include accrued expenditure in QNZPE?

      No, all QNZPE must have been paid at the time of final application unless it falls within one of the exceptions set out in Clause 22 of the Criteria. Please note that all of the exceptions in clause 22.2 (unpaid interest, auditor’s fees and marketing or post-production costs) must be approved by the NZFC and the combined total must not exceed 1% of the total production budget.

      FAQ: Can non-cash payments be treated as QNZPE?

      Can non-cash payments be treated as QNZPE?

      No, for the purposes of the NZSPG scheme, only costs paid in cash can be included in QNZPE. In-kind payments or similar do not qualify.

      FAQ: Can deferred or held-back fees be claimed as QNZPE?

      Can deferred or held-back fees be claimed as QNZPE?

      Yes, provided they meet the requirements in Clause 22.1 of the Criteria. Please note that only fees or overheads that are held back for the purpose of cashflowing any part of the funding required to meet the budget can be treated as QNZPE under this exception. The funding that is cashflowed by such holdbacks could be (for example) an instalment of a sales advance or minimum guarantee or part of the estimated NZSPG grant.

    9. (i) Acquisition of Depreciating Asset

      Except for copyright acquisition expenditure that qualifies as QNZPE, the costs of acquiring a depreciating asset and any capital costs invested in that asset. See clause 24 for the definition and treatment of a depreciating asset.

      FAQ: Should I treat wardrobe and props as expenses or assets?

      Should I treat wardrobe and props as expenses or assets?

      It depends on what the value of each item is at the end of the production. If items have no value at the end of production and are thrown away or destroyed, then the full purchase price can be claimed as QNZPE. If there is still some value at the end of production and the item is sold, then the difference in price should be used for your QNZPE calculation. Please refer to the IRD’s website for information on depreciation used to estimate how much assets, props/wardrobe etc., are worth at the end of a shoot: http://www.ird.govt.nz/business-income-tax/depreciation/bit-accounting-depreciation.html

    10. (j) Legal

      Legal fees that are NOT related to

      1. (i)the drafting and/or negotiation of production and financing documents; or
      2. (ii)legal advice on issues arising in the normal course of the making of a production.

        Applicants should ensure that their legal advisors provide a breakdown of their fees.

    11. (k) Others

      Cast and Crew Perks, gifts, fines, Entertainment and Gratuities and any historical costs listed in clause 5.

      FAQ: What are cast and crew ‘perks’?

      What are cast and crew ‘perks’?

      Extra benefits provided to cast and crew are assessed as perks and do not count as QNZPE, unless the applicant is contractually obliged to provide the ‘perk’ to the relevant cast or crew member in relation to their services in New Zealand, e.g. gym membership; nanny/tutor services; companion airfares (however, only the incoming fare can be claimed, if travelling from off-shore).

      FAQ: Can I claim for meals in restaurants, when they are part of meetings to discuss the production?

      Can I claim for meals in restaurants, when they are part of meetings to discuss the production?

      No. Meals outside the production base can only be claimed as QNZPE where they are provided in place of standard production catering for the crew and cast (i.e. crew working away from set, during recces, etc). In all cases, if a meal includes alcohol the cost of the entire meal will be assessed as ‘entertainment’ and excluded from the QNZPE calculations.

      FAQ: If I give a gratuity can I claim that as QNZPE?

      If I give a gratuity can I claim that as QNZPE?

      Gifts and gratuities are not QNZPE. Gratuities include tips, koha, vouchers and similar payments for which no invoice or receipt is provided. However, if you obtain a receipt from the person to whom the koha was paid, and this was an expense of the production in New Zealand, then you can claim this as QNZPE.

    12. (l) Stock or archive footage

      The costs of stock or archive footage above 20% of QNZPE or $500,000 whichever is the lesser, except in exceptional circumstances as determined by the NZSPG Panel, at their sole discretion and on a case-by-case basis.

    Additional FAQs

    FAQ: How should I apportion costs between qualifying and non-qualifying services or between multiple productions or other activities?

    How should I apportion costs between qualifying and non-qualifying services or between multiple productions or other activities?

    Apportionment is best dealt with on a case-by-case basis. However, there are some overriding guidelines:

    • The proportion of costs claimed must be fair and reasonable in the circumstances.
    • The amount claimed should reflect the provisions of any contract including the timing of any instalments of the agreed fee or cost.
    • The amount claimed should also reflect the actual time spent providing qualifying services. This should be a portion of the actual time spent in New Zealand on the provision of all services, or the actual or carefully estimated use of a good or person by the production as a proportion of the total cost of that good or person over the same period of time.

    When looking at apportionment the NZFC will review the relevant contract, the production travel schedule, the timing of payments and any other supporting information to determine what is a fair and reasonable apportionment. If you are unsure of how to apportion any costs, please contact the NZFC for guidance before you submit your application.

    FAQ: I have contracted a New Zealand company to work on the film. Are all of its costs automatically QNZPE?

    I have contracted a New Zealand company to work on the film. Are all of its costs automatically QNZPE?

    No, just because payment is made to a New Zealand company it does not mean all costs are automatically QNZPE. If a supplier performs any element of its services outside New Zealand which would normally be excluded from QNZPE if performed directly by the applicant, these services need to be separately identified in any invoices and excluded from QNZPE.

    FAQ: What general administration costs can I claim as QNZPE?

    What general administration costs can I claim as QNZPE?

    Administration costs incurred by the applicant on the production in New Zealand are QNZPE. Where these costs have been on-charged by a related party, the applicant should follow the apportionment guidelines outlined in the FAQ and ensure that evidence of the rationale behind the apportionment is available. For example, where parent company personnel have been shared between projects, a record of time spent by those personnel on each project should be maintained. This also includes administration costs included in the claimed business overhead cap where they are not specific to the individual production.

    FAQ: Can I include any contingency in the estimated QNZPE at provisional application stage?

    Can I include any contingency in the estimated QNZPE at provisional application stage?

    No. Contingency will not be assessed as QNZPE at provisional stage unless it is necessary for the NZFC to take a view (for instance, where the QNZPE or TPE is close to the threshold). In these circumstances, the provisional certificate will note any assumption made around contingency.

    In a final application, only the amounts of contingency actually spent on qualifying goods and services will be QNZPE.

    FAQ: Does the premium payable on an NZFC development loan qualify as QNZPE?

    Does the premium payable on an NZFC development loan qualify as QNZPE?

    Yes, provided it is paid after 1 July 2008.

    FAQ: Can I claim the Approved Issuer Levy as QNZPE?

    Can I claim the Approved Issuer Levy as QNZPE?

    The Approved Issuer Levy cannot be claimed as QNZPE as it is paid to the IRD in lieu of withholding tax and is essentially a tax on interest.

    FAQ: Can I claim the Screen Producers and Directors Association (SPADA) Levy as QNZPE?

    Can I claim the Screen Producers and Directors Association (SPADA) Levy as QNZPE?

    Yes, the SPADA Levy qualifies as QNZPE.

Section 5 - Treatment Of Expenditure

  • 18. Income Tax

    The New Zealand Grant will be given standard grant treatment for income tax purposes. That is, the cost base of the production will be reduced by the amount of the New Zealand Grant.

    The New Zealand Grant is treated as excluded income for the purposes of income tax.

    Where co-investment/co-funding is provided by a New Zealand government agency, special tax rules will apply. In brief, the co-funding will be treated as if it were a grant, but any payments back will be tax deductible.

    FAQ: Do I have to pay income tax on the Grant?

    Do I have to pay income tax on the Grant?

    No, the Grant is exempt for the purposes of income tax.

  • 19. GST

    All figures set out in these criteria are net of GST. As such, the New Zealand Grant is calculated in relation to amounts that are net of GST. However, New Zealand tax law requires that the New Zealand Grant is paid GST inclusive. For this reason, the New Zealand Grant will be made to eligible applicants on a GST plus basis with applicants having to return the GST component in their next GST return.

    FAQ: Does the Grant include GST?

    Does the Grant include GST?

    The Grant is calculated on amounts that are net of GST. However, due to New Zealand tax laws, when the Grant is paid, it is paid plus GST. The applicant must therefore return the GST component as part of its normal GST returns.

  • 20. Currency Exchange

    All production expenditure incurred in foreign currencies must be converted into New Zealand dollars at the spot rate on the date of payment or, if this is not practicable, on a monthly basis at the mid-month exchange rates published by the Inland Revenue (www.ird.govt.nz).

    FAQ: Can transactions through off-shore bank accounts or in non-New Zealand currencies be included in QNZPE?

    Can transactions through off-shore bank accounts or in non-New Zealand currencies be included in QNZPE?

    Yes, as long as the applicant incurred the cost and the payment otherwise qualifies as QNZPE.

  • 21. Non-Arm's Length Expenditure

    The basis of the arm's length principle is to ensure that amounts charged between the applicant and any associate entities (including parent and subsidiary entities) for the provision of goods or services are commercially reasonable.

    Where the applicant incurs expenditure under a non-arm's length arrangement that inflates the cost of a particular good or service in relation to the production, then only the commercial rate for that good or service is QNZPE. The commercial rate will be taken to be the amount that would have been incurred if the parties were dealing at arm's length with each other charging what they would ordinarily charge to an unrelated party and/or paying what they would ordinarily agree to pay an unrelated party. Factors such as the length of the hire, supply and demand issues, any bulk discount that might reasonably be expected to apply, and overall cost-effectiveness will be taken into account when considering the commercial rate.

    The arm's length principle applies to any act or transaction directly or indirectly connected with any expenditure incurred by the applicant - i.e. the principle still applies if a non-arm's length deal between other parties otherwise inflates the expenditure of a particular good or service purchased by the applicant.

    Where there is significant non-arm's length expenditure in an application, the total budget will be considered against the total likely income earned by the production along with the overall feasibility of the production without the non-arm's length expenditure. If the NZSPG Panel then considers that any costs are calculated or that the production is structured in a way that is inconsistent with the intent of the criteria, it may be rejected by the NZSPG Panel at their sole discretion as per clause 3.

    Where parties providing goods or services to the production are also investing in the production, the charges for their goods or services should also be at commercial rates (taking into account any bulk discount that might reasonably be expected to apply) and at a consistent level with the charges of other parties providing goods or services to the production who are not also investing in the production.

  • 22. Non-Accrual Basis of Expenditure

    To be QNZPE a cost must have actually been incurred on the making of the specific production for which the application is made. In addition, the applicant must have actually discharged in full its liability to pay at the time of final application for the New Zealand Grant (for example, paid in cash, by cheque or electronic transfer). Credits should not be off-set against any QNZPE to be claimed on the production.

    Exceptions: This requirement does not apply where:

    22.1Fees or overheads held-back

    1. (a)Part of the funding for the production (including any part of the expected New Zealand Grant that was not cashflowed to the applicant) was unpaid at the time of final application;
    2. (b)This funding was required to meet the cost of the production;
    3. (c)Certain fees (that are otherwise QNZPE) have not been paid because they are being ‘held back' pending receipt of such funding; and
    4. (d)Such fees are payable to producers, director/s or as a production entity overhead.

    Where all of the above conditions are met, the amount of the unpaid fees or overheads is QNZPE.

    For example, if a bank cashflows 80% of the estimated value of the New Zealand Grant and the budget requires 100% of the New Zealand Grant, a producer might hold back his or her fees (that otherwise qualify as QNZPE) to cover the remaining 20% and then recover this part of their fee when the New Zealand Grant is received. In this case, the entire amount of the producer's fee is QNZPE.

    22.2Interest, auditor's fees and marketing or post-production costs

    Unpaid interest for any loan cashflowing the New Zealand Grant, auditor's fees, marketing and/or post-production costs may be included in QNZPE provided that:

    1. (a)the amounts have been agreed with the NZFC and are no more than 1% of the total production budget;
    2. (b)invoices for those amounts are provided to the NZFC as soon as reasonably possible after submission of the final application; and
    3. (c)proof that the amounts have been paid is provided to the NZFC prior to payment of the New Zealand Grant relating to those amounts.

    FAQ: I see I can now include some accrued (unpaid) interest in QNZPE. How should I calculate this?

    I see I can now include some accrued (unpaid) interest in QNZPE. How should I calculate this?

    You should use the best estimate available to you. In terms of estimating a date for repayment of the loan, we suggest you use the estimated timeframe for processing your final application (3 months) plus 10 days from receipt of invoice to allow for payment of the Grant. Please remember that the portion of the New Zealand Grant payable on any accrued interest (that has been approved under clause 22) will not be paid until proof that the accrued interest has been paid has been provided to the NZFC.

  • 23. Expenditure by Prior Entities

    Eligibility for the New Zealand Grant extends to an applicant that takes over the production from another entity (or entities) and completes the production, such as a completion guarantor. The applicant is taken to have incurred the production expenditure of the previous entity (or entities) for the purposes of the New Zealand Grant. Any costs incurred by the applicant in the takeover of the production are excluded from QNZPE. Costs incurred by entities prior to a SPV being set up must be reimbursed by the SPV to be QNZPE.

  • 24. Depreciating Assets

    Where an applicant purchases an asset for use in the production and sells or disposes of that asset on the Completion of the production or on completion of the QNZPE, the net cost of that asset can be claimed as QNZPE (provided the depreciation occurred in New Zealand).

    Where an applicant holds a depreciating asset (other than copyright), uses it to make the production and retains it at the Completion of the production, then QNZPE (provided the depreciation occurred in New Zealand) may include so much of the decline in value over the effective life of the asset as is attributable to its use on the production (for tax purposes).

    The definition of a ‘depreciating asset' for the purposes of the New Zealand Grant is the same as that used by the IRD. Further information about the treatment of depreciating assets under Subpart EE of the Income Tax Act 2007 may be downloaded from the IRD website at www.ird.govt.nz.

  • 25. Transfer Pricing

    When considering the issue of transfer pricing, it is difficult to be prescriptive as transfer pricing analysis is extremely fact-intensive. However, IRD would favour the use of cost plus methodology for a low risk production contract, the mark-up varying with the degree of risk assumed, and functions performed, by the applicant and the timing of payments received for services provided.

Section 6 - Application Process

  • 26. Provisional Applications

    Before production has started, or at any time during production, an applicant may apply for provisional certification of eligibility for a New Zealand Grant. While this is not mandatory, applicants are encouraged to apply for provisional certification in all cases but only when financing is sufficiently advanced. The purpose of this requirement is to avoid premature applications and subsequent re-applications which can be time-consuming and costly.

    A Provisional Certificate is not a guarantee that a Final Certificate will be issued. It will, however, provide an indication of eligibility and the extent to which:

    1. (a)the production is an eligible format;
    2. (b)the production qualifies as having Significant New Zealand Content;
    3. (c)the production is likely to meet the minimum expenditure threshold;
    4. (d)the level of non-NZ government funding meets the minimum threshold;
    5. (e)the evidence of commercial distribution meets the criteria;
    6. (f)the application meets other relevant criteria; and
    7. for applications for the Additional Grant;
    8. (g)the additional criteria in Section 3 have been satisfied.

    To apply, you must complete the relevant sections of the provisional application form and submit it to the NZFC with all of the required attachments. The NZSPG will assess the application and decide whether to issue a Provisional Certificate.

    A Provisional Certificate will lapse six months from the date of issue, unless the production has commenced Principal Photography within that time period. Applicants may apply to the NZFC for an extension to their Provisional Certificate in exceptional circumstances and may, in any event, submit a new application for a Provisional Certificate but a re-application fee will be charged. The amount of the fee will be as published on the NZFC website.

    Where an applicant holds a Provisional Certificate but material elements of the production change (e.g. changes to creative personnel, cast, filming locations) then the applicant should contact the NZFC to see if those changes may affect the eligibility of the production for a New Zealand Grant. This will be particularly important for matters affecting Significant New Zealand Content.

    Applicants are eligible to apply for provisional certification where they are either:

    1. (a)the production entity responsible for the making of the production; or
    2. (b)the entity responsible for developing a project prior to the establishment of a production entity.

    If the applicant is unsure as to whether its evidence of commercial distribution will be satisfactory or not, the applicant is encouraged to discuss this with the NZFC prior to lodging the provisional application form.

    FAQ: Do I have to apply for provisional certification?

    Do I have to apply for provisional certification?

    No, but applicants are strongly advised to apply for provisional certification so that the NZFC can identify potential issues early on and notify applicants. Please note that a provisional certificate is an indication of eligibility only and is not a guarantee that a final certificate will be issued. In all cases, you must submit a final application which provides evidence that all relevant criteria have been satisfied.

    FAQ: When should I apply for provisional certification?

    When should I apply for provisional certification?

    Applicants are advised to apply for provisional certification when their production financing is sufficiently advanced. Any premature applications that require a subsequent re-application may be subject to a re-application fee at a rate published on the NZFC website.

    FAQ: Does provisional certification expire?

    Does provisional certification expire?

    Yes, provisional certification expires 6 months after the date of the provisional certificate unless the production has commenced principal photography within that timeframe. You may apply to the NZFC for an extension in exceptional circumstances. Alternatively you can submit a new provisional application but you may be required to pay a re-application fee.

    FAQ: Can I apply for a provisional certificate without a distribution agreement?

    Can I apply for a provisional certificate without a distribution agreement?

    Evidence of distribution is required to obtain a provisional certificate. If you don’t have a signed deal memo or distribution agreement at the time you lodge your provisional application, then you can request the NZFC to approve a draft version. In which case, your provisional certificate will state that provided you enter into a legally binding deal memo/distribution agreement (as the case may be) on the terms submitted with your application, then you will meet the distribution requirements in the criteria.

  • 27. Exchange Rate Fluctuation and Pre-qualification

    Applicants concerned that they may not meet the expenditure threshold for a New Zealand Grant solely due to fluctuations in exchange rates may ‘pre-qualify' for the New Zealand Grant by following the process below.

    The applicant should submit a provisional application under clause 26 and at the same time should:

    1. (a)Notify the NZFC that, solely for the purpose of meeting the expenditure threshold, they may require any non-New Zealand dollar QNZPE converted at the ‘preset exchange rate' (defined below); and
    2. (b)Nominate the relevant non-New Zealand dollar currency or currencies.

    The provisional application must be received by the NZFC no earlier than three months before the start of Principal Photography. In the event that the start date is delayed, the applicant may reapply.

    On the date the NZFC receives the provisional application it will obtain the relevant exchange rate/s from the Reserve Bank of New Zealand. This rate or rates will become the ‘preset exchange rate/s'.

    If at the time the applicant submits its final application for the New Zealand Grant, the QNZPE is below the relevant threshold, the NZFC will apply the ‘preset exchange rate/s' against the QNZPE incurred in the nominated non-NZ dollar currency or currencies to recalculate the applicant's ability to meet the threshold.

    In the event that the threshold is then met and the application is approved, the amount of the New Zealand Grant will be calculated and paid on actual QNZPE incurred (using the actual exchange rates as per clause 20 to convert any non-NZ dollar QNZPE).

    FAQ: How do I decide what exchange rate to use for non-New Zealand dollar costs?

    How do I decide what exchange rate to use for non-New Zealand dollar costs?

    For the purpose of converting foreign currency amounts to NZ dollars in an application you should use:

    1. (a)the actual rate of exchange at the time the expenditure was incurred (the spot rate published by the Reserve Bank of New Zealand will be used to calculate this);
    2.  or (if this is not practicable)
    3. (b)the Inland Revenue mid-month exchange rates (available on www.ird.govt.nz).

    FAQ: Can I pre-set an exchange rate prior to production?

    Can I pre-set an exchange rate prior to production?

    Yes, but only for the purpose of meeting the expenditure threshold and only if:

    • your estimated QNZPE or TPE is close to the relevant expenditure threshold;
    • part of that amount will be spent in non-New Zealand dollars; and
    • you are concerned that the exchange rate fluctuations over the production period may lead to your actual expenditure falling below the relevant threshold.

    The pre-set rate only applies to the calculation of the spend threshold - nothing else. The actual or IRD rates (whatever was used by the producer to convert the foreign currency costs) are used to calculate the grant amount. Once you have received a ‘pre-set’ rate, you may not apply for a new pre-set rate unless you are submitting a new provisional application (and pay the re-application fee).


    At the time of final application, the IRD mid-month rate or the actual exchange rate should be used. Once an application is approved, the Grant is paid on the actual QNZPE incurred (not the amount calculated using the ‘pre-set’ rate).

  • 28. Information Before and During Production

    For planning purposes applicants should provide advance notice by email to [email protected] of their intention to apply for a New Zealand Grant and, if shooting is to occur in New Zealand, the estimated shoot dates.

    Throughout the production, the NZFC may request information on estimated QNZPE incurred to date and forecast QNZPE for the New Zealand Government's financial planning purposes only.

  • 29. Final Applications

    An applicant must submit an application for a Final Certificate no later than six months after Completion of the production. Each application must be made on the final application form.

    FAQ: When is a production considered to be completed?

    When is a production considered to be completed?

    A production is completed when it is first in a state where it could reasonably be regarded as ready for distribution, broadcast or exhibition to the public. Refer to Appendix 1 of the Criteria for the definition of “Completed”. This is relevant as you must submit your final application no later than 6 months after completion of the production.

    The following information must be included with each final application form:

    29.1Audited expenditure statement

    All costs claimed as QNZPE (and TPE for Official Co-productions) must be presented in an audited expenditure statement. The audit must be prepared by a person who is:

    1. (a)qualified under the Companies Act 1993 to audit companies;
    2. (b)not an officer, partner or employee of the applicant, or a related body corporate of the applicant (but may be contracted by them from time-to-time on a non-permanent basis). A related body corporate of an applicant would be a subsidiary of an applicant, the holding entity of an applicant or a subsidiary of the holding entity of the applicant; and
    3. (c)approved by the NZFC (as published on the NZFC website from time to time).

    The auditor's report is provided at the applicant's expense, with the name of the auditor and auditor's company or firm, qualifications, and contact details to be provided in the relevant section of the application form.

    29.2Copy of Production

    If requested, the applicant must provide a copy of the completed production.

    29.3Statutory declaration

    The information provided in a final application must be certified in a statutory declaration by an authorised person from the applicant - normally this would be the producer or a director of the applicant entity.

    29.4Further information as requested

    The NZFC reserves the right to require any further information deemed necessary to complete the assessment process. This information must be provided at the applicant's expense within 28 days of the NZFC's request, although the applicant may write to the NZFC seeking an extension of time.

    Applicants should familiarise themselves with the relevant application form and the further information requested in that form.

  • 30. Credit and Promotional Materials

    All applicants must provide an on-screen end credit in the completed production. An example follows:

    The filmmakers acknowledge the assistance of the New Zealand Government's Screen Production Grant

    In exceptional circumstances (such as where the provision of a credit is not within the control of the applicant), the NZFC may agree to waive the on-screen credit requirement.

    Unless specifically waived by the NZFC, applicants must provide promotional materials to the NZFC in accordance with the Promotional Materials Schedule available on the NZFC website.

    FAQ: Do I have to provide a credit and promotional materials to the New Zealand Government via the NZFC?

    Do I have to provide a credit and promotional materials to the New Zealand Government via the NZFC?

    Yes, this is now mandatory. However, if there are exceptional circumstances which mean you are unable to provide a credit and/or provide promotional materials, you need to discuss this with the NZFC before submitting of your final application. Waivers of this requirement will only be given where the applicant is genuinely not in a position to satisfy this criteria.

  • 31. Confidentiality

    Certain information supplied by the applicant will be provided to the NZSPG Panel, the IRD, the Ministry of Business, Innovation & Employment, the Ministry for Culture & Heritage and independent consultants where reasonably necessary during the application and approval process.

    The NZFC will use reasonable efforts to maintain the confidentiality of the information provided by the applicant. The NZFC notes however that it is subject to various disclosure requirements, for example under the Official Information Act 1982, and shall not be liable for any disclosure it believes (acting reasonably) it is required to make.

    As such, the applicant should clearly indicate those parts of its application which it regards as commercially sensitive and confidential. In processing a request under the Official Information Act 1982, the NZFC will consult the relevant applicant prior to a decision on release of information.

  • 32. Information for Research Purposes

    The NZFC may wish to use information provided by the applicant for research purposes; for example, as part of a study on the broader economic effects of a production. Information would only be used with the written agreement of the applicant.

  • 33. Exit Survey

    In the final application form, applicants may be asked to complete an online survey about their experience of making a production in New Zealand. This information will be used for research and marketing purposes and, unless the applicant agrees otherwise, it will be treated confidentially and only non-identifying aggregate information will be made public.

  • 34. Further Information

    For further information on these criteria and the process of applying for a New Zealand Grant please contact the Incentives Executive on tel: +64 (0)4 382 7680, email: [email protected].

    For information about taxation and other obligations of entities commencing business in New Zealand, filing business activity statements and annual income tax returns consult the IRD website at www.ird.govt.nz, or IRD's screen production desk's website at www.ird.govt.nz/industry-guidelines/screen-production/.

  • 35. Application Forms

    Application forms can be downloaded from the NZFC website at www.nzfilm.co.nz/funding/feature-films/production-funding/new-zealand-screen-production-grant/nzspg-new-zealand-productions

    Applications, including all required documentation, should be sent to:

    Incentives Executive
    NZ Film Commission
    PO Box 11 546
    Manners Street
    Wellington 6142
    New Zealand

    Courier address:
    Level 3
    119 Ghuznee Street
    Wellington 6011
    New Zealand

    Email address:
    [email protected]

  • Additional FAQs

    FAQ: Who can apply?

    Who can apply?

    The applicant must be the entity responsible for all activities involved in making the production in New Zealand. Only one entity per production is eligible for the Grant. The entity must also be a Special Purpose Vehicle (SPV), as per the requirements set out in Clause 9 of the Criteria.

    FAQ: Where can I get application forms?

    Where can I get application forms?

    Application forms are available from the NZFC website. Please ensure that the application form and all attachments are submitted as separate documents (not scanned together) and that each attachment is named and numbered in accordance with the checklist at the back of the application form.

    Note that at final application stage, all above-the-line contracts, distribution agreements and financing agreements that are submitted as attachments must be dated and signed by all parties to the agreement.

    FAQ:How long will it take to process my application?

    How long will it take to process my application?

    Provided all required information is included, the NZFC will endeavour to process applications as follows:

    • Provisional applications: within 8 weeks of the NZFC’s acknowledgement letter.
    • Final applications: within 3 months of the NZFC’s acknowledgement letter.

    Please note that:

    • The processing time does not start until the date the NZFC sends you an acknowledgement of receipt letter (which will only be sent once the NZFC has checked that all required information has been received); and
    • Actual processing time will depend on the NZFC’s workload and how promptly any further information requested is provided by the applicant.

    FAQ: What happens if I submit my final application, then realise that I forgot to claim some QNZPE?

    What happens if I submit my final application, then realise that I forgot to claim some QNZPE?

    Provided the application has not yet been considered by the NZSPG Panel, you can choose to withdraw the application and then re-submit it with the additional QNZPE included. However, the additional QNZPE will need to be covered by the auditor’s report and you must re-submit the application before 6 months has expired from the completion of the production.

    FAQ: When is the Grant paid?

    When is the Grant paid?

    Once your final application has been approved you will be sent an approval letter along with a pro-forma invoice. You must then send an invoice to the NZFC including bank account details and the payment will be made into the nominated bank account within 10 business days of the NZFC receiving the invoice. You may assign the benefit of the Grant to a third party and may nominate a bank account into which the Grant should be paid.

Section 7 - Assessment Process

  • 36. NZSPG Panel

    The NZSPG is administered by the NZFC. Applications for a New Zealand Grant will be assessed by a panel made up of industry practitioners and representatives from the NZFC and the Ministry for Culture & Heritage (NZSPG Panel). The NZSPG Panel will be the body responsible for assessing whether applications satisfy the criteria. A representative from the IRD and the Ministry of Business, Innovation & Employment is invited to attend all NZSPG Panel meetings.

    FAQ: Can I appeal NZSPG Panel decisions?

    Can I appeal NZSPG Panel decisions?

    Decisions of the NZSPG Panel are final and cannot be appealed. Prior to each meeting, the NZFC or the independent consultant will attempt to advise applicants of any proposed adjustments to the claimed QNZPE and applicants will have an opportunity to comment on those adjustments. Applicants’ comments will be reported to the NZSPG Panel.

  • 37. Independent Consultants

    The NZSPG Panel may seek the advice of one or more independent consultants to provide an independent assessment of any matters relating to the criteria, the New Zealand Grant or the Significant New Zealand Content Test.

    Where necessary the consultant may seek further information from the applicant or its auditor. Where this information relates to non-arm's length issues, the consultant may seek information on the process and methodologies adopted to show that the amounts charged accord with the arm's length principle. All consultants will be subject to a contractual duty of confidentiality.

  • 38. IRD Verification and Payment of New Zealand Grant

    Payment of the New Zealand Grant is dependent on:

    1. (a)the IRD verifying the quantum of the potential claim for QNZPE against records held by the IRD; and
    2. (b)approval by the NZSPG Panel.

    Once a complete final application has been received, the NZFC will endeavour to process the application within three months. Payment of the New Zealand Grant will be made in New Zealand dollars by NZFC within ten business days of receipt of an invoice from the applicant.

Appendix 1 - Further Definitions And Interpretation

  • Where used in these criteria, the terms below shall have the meaning or be interpreted as follows:

    Cast and Crew Perks means benefits (for example; companion airfares, a personal chef) provided to a cast or crew member that are not part of the total contracted remuneration package for that person.

    Completed or Completion means when a production is first in a state where it could reasonably be regarded as ready to be distributed, broadcast or exhibited to the general public. For different formats, this means:

    1. (a)feature film - when it is completed to Digital Cinema Package (DCP) format or any replacement format ready for distribution;
    2. (b)single episode programme - when the programme is finished to master video tape stage (or digital equivalent) with credits ready for broadcast;
    3. (c)series - when all of the episodes in the series are finished to master video tape stage (or digital equivalent) with credits ready for broadcast;
    4. (d)season of a series - when all of the episodes in the series are finished to master video tape stage (or digital equivalent) with credits ready for broadcast, completed within one defined time period or “season” of a series.

    Entertainment includes alcohol, wrap parties, and meals outside the production base unless such meals are in place of standard production catering for cast and crew.

    Final Certificate means a certificate issued to an applicant by the NZFC that states whether or not, on the basis of the information included in a final application, a production has qualified for a New Zealand Grant and the amount of the New Zealand Grant.

    Financing Expenditure includes expenditure connected with raising and servicing finance for the production, such as interest payments on loans to cashflow the New Zealand Grant, development loans and pre-sales or gap funding cashflowed to the production budget (but not deferrals). It does not include fees or premiums associated with the provision of any equity funding.

    Gratuities includes tips, koha and similar payments for which no invoice or receipt is provided.

    Guaranteed Deferments meanspayments to personnel or the production entity (including payments for story rights) that are quantifiable prior to Completion of the production but are payable after Completion of the production.

    International Grant means the grant available under the NZSPG to productions that meet the eligibility criteria under the NZSPG Criteria for International Productions. It includes the PDV Grant.

    LBSPG means the Large Budget Screen Production Grant scheme that was introduced by the New Zealand Government in 2003 and that has been replaced by the NZSPG.

    New Zealand government production funding means funding that is:

    1. (a)provided by the NZFC, the NZSPG (or by any entity cashflowing all or part of an estimated New Zealand Grant), the New Zealand Film Production Fund Trust, Creative New Zealand, NZ On Air, Te Māngai Pāho, or any predominantly New Zealand government-funded entity but does not include funding provided by Television New Zealand, Maori Television or any other broadcaster that receives funding from the New Zealand government or any funding that is a loan by the NZFC or any other New Zealand government entity for the purpose of cashflowing funding other than the New Zealand Grant; and
    2. (b)to be cashflowed to the production budget of the production.

    New Zealand Tax Resident means:

    1. (a)in the case of a natural person, a person that the Income Tax Act 2007 treats as a New Zealand resident under section YD 1; or
    2. (b)in the case of a company, a company that the Income Tax Act 2007 treats as a New Zealand resident under section YD 2.

    Official Co-production means a production certified by the NZFC and the other country's competent authority as an official co-production pursuant to one of New Zealand's bilateral co-production treaties or agreements.

    FAQ: What is an official co-production?

    What is an official co-production?

    An official co-production is one that has been certified under one of the co-production treaties that New Zealand has with other countries (see the NZFC website for the most up-to-date list: http://www.nzfilm.co.nz/international-productions/co-productions).

    FAQ: Does the same co-production criteria apply to non-official co-productions?

    Does the same co-production criteria apply to non-official co-productions?

    No. Non-official co-productions are subject to the general NZSPG Criteria and the relevant official co-production criteria does not apply.

    FAQ: What is TPE?

    What is TPE?

    TPE (Total Production Expenditure) is only relevant if your production is an official co-production between New Zealand and another country or countries, and you are using TPE to calculate the expenditure threshold or the business overheads cap.

    It is essentially the total production budget (worldwide) less certain excluded costs.

    FAQ: Can I include contingency in estimated TPE at provisional application stage?

    Can I include contingency in estimated TPE at provisional application stage?

    If your production is an official co-production (and you are therefore using TPE to meet the threshold), then you can include 100% of contingency in your TPE calculation. The contingency can include the New Zealand contingency portion and the off-shore contingency portion. Applicants should note that this is for the purpose of meeting the expenditure threshold only, and contingency will still not be treated as QNZPE at provisional application stage. At final application stage, only contingency spent on QNZPE can be claimed.

    FAQ: How should I apportion contingency between each co-producer’s spend?

    How should I apportion contingency between each co-producer’s spend?

    This will be determined on a case-by-case basis, however, it is generally expected that contingency will be apportioned in accordance with the estimated total spend of each co-production party. If you wish to apportion the contingency using a different method, then you should set out the rationale for that method in your application.

    FAQ: What information do I need to get from my co-producer?

    What information do I need to get from my co-producer?

    If you are relying on TPE (and not just QNZPE) to meet the relevant expenditure threshold then you need to have access to full financial information for the production worldwide and you must provide that information in English to the NZFC upon request. The presentation and coding of the financial information (e.g. cost report) must be consistent with the information provided in relation to QNZPE, and must follow standard accounting practices. Please also be aware that audited cost reports will be required.

    You may also be required to provide copies of contracts and other documents that your co-producer has entered into if they relate to any costs claimed by you as QNZPE (e.g. cast contracts).

    All financial information and other documents supplied by your co-producer must be in English.

    FAQ: What should I do first – submit my co-production application or my NZSPG application?

    What should I do first – submit my co-production application or my NZSPG application?

    You should submit your co-production application and your NZSPG application around the same time. Please note that the NZFC’s process for assessing each application is separate and so you need to submit separate applications with separate copies of all relevant documents. This applies to both provisional and final applications.

    FAQ: When does my co-production certificate need to be in place?

    When does my co-production certificate need to be in place?

    A copy of your co-production certificate needs to be submitted to the NZFC at least two business days before your NZSPG application is considered by the NZSPG Panel. If possible, you should include it with your application, however, the NZFC understands that the two application processes often happen simultaneously and therefore the NZFC will accept a submission of the co-production certificate after the NZSPG application has been submitted. The NZSPG Panel will assess your final application but the Grant will not be paid out until the co-production is approved by both authorities.

    Participation Payments means payments to personnel or the production entity (including payments for story rights) that are contingent on gross and/or net receipts of the production.

    Principal Photography means:

    1. (a)for drama: the period of time during which the main shooting of the production takes place. It is expected that certain key shooting cast and crew (such as the director, director of photography, key cast, hair and make-up, continuity) will be present. The period of time is usually a fixed period, however, where a pick-up shoot, second unit shoot or re-shoot meets this criteria, it will also be considered principal photography.
    2. (b)for documentaries: the period of time required to capture the image of the subject matter of the production where the director, or in some cases, the field director, is present for the shoot. The shoot does not need to occur over a fixed period of time. Interviews with key subjects and time critical photography will be considered principal photography. Where there is no shoot element for a documentary, the period of time during which the edit takes place.
    3. (c)for animation: the period from the day on which production of the animated image commences until the day that the animated images are completed.

    Provisional Certificate means a certificate issued to an applicant by the NZFC that states whether or not, on the basis of the information included in a provisional application, a production is likely to qualify for a New Zealand Grant.

    Residuals means any residual payments due to personnel (including those distributed by guilds, unions or other collecting bodies) for exhibition and distribution of a production other than its original release (these are not classified as Participation Payments).

    Significant New Zealand Content means significant New Zealand content for the purposes of the NZSPG Criteria for New Zealand Productions as determined in accordance with the Significant New Zealand Content Test.

    Significant New Zealand Content Test means the points test set out in the Significant New Zealand Content Guidelines at Appendix 3.

    SPIF means the Screen Production Incentive Fund that was introduced by the New Zealand Government in 2008 and that has been replaced by the NZSPG.

Appendix 2 - Total Production Expenditure (TPE)

  • 1. General TPE Definition

    TPE is the expenditure incurred in, or that is reasonably attributable to, actually making the production, whether in New Zealand or elsewhere, to bring the production up to the state that the production is ready to be distributed, broadcast or exhibited to the general public. TPE includes all expenditure that is QNZPE but excludes the expenditure set out in clause 2 of this Appendix.

  • 2. Specific Exclusions from TPE

    The following expenditure items are excluded from TPE unless they are QNZPE:

    1. (a)Financing Expenditure
    2. (b)Development expenditure
    3. (c)Acquisition or licensing of copyright
    4. (d)General business overheads
    5. (e)Publicity and promotion expenditure
    6. (f)Guaranteed Deferments, Participation Payments, Residuals or advances thereof
    7. (g)Acquisition of a depreciating asset

    All costs associated with Cast and Crew Perks, gifts, fines, Entertainment and Gratuities and any historical costs listed in clause 5 are also excluded from TPE.

Appendix 3 - Significant New Zealand Content Guidelines

  • Introduction

    The New Zealand Screen Production Grant (NZSPG) was introduced by the New Zealand Government on 1 April 2014.

    All New Zealand productions that meet the base eligibility criteria for the NZSPG are able to access a grant equivalent to 40% of qualifying New Zealand production expenditure (QNZPE) up to $15 million QNZPE. New Zealand productions are those productions that have significant New Zealand content. Official co-productions are deemed to have significant New Zealand content. Certain New Zealand productions may also be entitled to a grant on additional QNZPE above $15 million but no more than $50 million if they meet the additional criteria in Section 3.

    These guidelines have been developed to provide information for producers on how assessment of a production's significant New Zealand content will be made.

    This document should be read in conjunction with the full criteria and other documentation for the NZSPG.

    The NZSPG is administered by the NZFC.

    The New Zealand Film Commission Act 1978, section 18 - Content of Films, provides that:

    1. (1)In carrying out its functions, the Commission shall not make financial assistance available to any person in respect of the making, promotion, distribution, or exhibition of a film unless it is satisfied that the film has or is to have a significant New Zealand content. [emphasis added]

    ‘Film' is defined broadly under the Act, and includes television and any other format screen production.

    For the purposes of determining whether or not a film has or is to have significant New Zealand content, the Commission is required under Section 18(2) of the Act to have regard to the following matters:

    1. (a)The subject of the film.
    2. (b)The locations at which the film was or is to be made.
    3. (c)The nationalities and places of residence of—
      1. (i)The authors, scriptwriters, composers, producers, directors, actors, technicians, editors, and other persons who took part or are to take part in the making of the film.
      2. (ii)The persons who own or are to own the shares or capital of any company, partnership, or joint venture that is concerned with the making of the film.
      3. (iii)The persons who have or are to have the copyright in the film.
    4. (d)The sources from which the money that was used or is to be used to make the film was or is to be derived.
    5. (e)The ownership and whereabouts of the equipment and technical facilities that were or are to be used to make the film.
    6. (f)Any other matters that in the opinion of the Commission are relevant to the purposes of this Act.

    These guidelines have been developed to provide information for producers and others in the screen industry with regard to how it is intended that assessment of a production's significant New Zealand content will, in general terms, be made for the purposes of NZSPG applications.

    As the NZSPG operates as a demand-driven production incentive, potentially with little government screen agency involvement during the development of the production, these guidelines have been developed to provide the maximum possible clarity for film-makers.

    These guidelines include the matters specified under Section 18(2), and provide a clear indicative framework regarding how, in general terms, the measuring and weighting of these factors would be intended to take place for productions applying for a New Zealand Grant.

    This document includes an indicative points framework for various production elements, and provides guidance on the awarding of points under each section.

  • NZSPG Panel Discretion

    These guidelines and the incorporated points framework are proposed to assist the NZSPG Panel in its decision-making and are published to provide information for the screen industry as to how assessments of significant New Zealand content are, in principle, intended to be made for the purposes of the NZSPG.

    The guidelines and points framework are not fixed policy rules and the NZSPG Panel will in all cases bring to bear its judgment and discretion in assessing a production's level of significant New Zealand content.

  • Assessment of Projects

    As a guide, and subject to the discretion referred to above, it is intended that a screen production's significant New Zealand content for the purposes of eligibility for the NZSPG would be assessed on the following basis:

    • production that received at least 20 points out of 32 would generally be considered to have significant New Zealand content for the purposes of the NZSPG, subject to there being no other relevant factors that would mitigate against eligibility.
    • All productions would be generally expected to receive a minimum of 3 points related to New Zealand Subject Matter (Section A).
    • All productions would generally be expected to receive at least 3 out of the total of 6 points available in sections C1 - C3 for Director, Producer and Scriptwriter.

    Definitions and other eligibility requirements for screen productions for the purposes of NZSPG are included in the criteria.

    As the expenditure thresholds for feature film and other formats differs, the NZSPG Panel will retain the ability to reject applications where it is suspected that feature films are applying as other formats.

  • Official Co-productions

    As stated in the full criteria, any film (including television and other format screen productions) certified by the New Zealand Film Commission as an ‘official co-production' pursuant to one of New Zealand's bilateral film co-production agreements will be considered to have significant New Zealand content for the purposes of eligibility for the New Zealand Grant (pursuant to section 18(2A) of the New Zealand Film Commission Act 1978).

  • Assessment of Significant New Zealand Content - Points Test

    Significant New Zealand Content Areas
    NB: Notes on each of the points below are summarised.
    Points Available
    A - New Zealand Subject Matter  
    A1 - Setting 3 (0 - 3)
    A2 - Lead Characters
    Documentaries: presenter/subjects
    3 (0 - 3)
    A3 - Creative Material 3 (0 - 3)
    A4 - Contribution to New Zealand Culture/History 2 (0 - 2)
    Total - Section A (minimum: 3) 11
    B - New Zealand Production Activity  
    B1 - Shooting - Location/Studio (50% for 1, 75% for 2) 2 (0 - 2)
    B2 - Visual Post-Production, Digital or Visual Effects (50% for 1, 75% for 2) 2 (0 - 2)
    B3 - Music Recording, Voice Recording, Audio Post-Production (50% plus) 1
    B4 - If applicable, Concept Design & Physical Effects (Period/Genre) (50% plus) 1
    Total - Section B 6
    C - New Zealand Personnel  
    To qualify, individuals must be a New Zealand citizen or permanent resident at the time the production is being made.  
    C1 - Director (2 points if the director is qualifying or where there are multiple directors, 1 point if more than 33% and 2 points if more than 66% or majority of episodes directed by a qualifying person) 2 (0 - 2)
    C2 - Producer (2 points if at least one of the producers is qualifying or if there are more than three, one of the three lead producers is qualifying) 2 (0 or 2)
    C3 - Scriptwriter (2 points if the writer is qualifying or where there are multiple writers, 1 point if more than 33% and 2 points if more than 66% or majority of episodes written by a qualifying person) 2 (0 - 2)
    C4 - Music Composer/Source Music (1 point if the composer is qualifying or if more than 50% of the source music is by qualifying persons) 1
    C5 - Lead Actors (1 point if one of the lead actors is qualifying, 2 points if 2 of the lead actors are qualifying)
    Documentaries: narrator/actors (if significant dramatic recreations)
    Animation: voice actors
    2 (0 - 2)
    C6 - Majority of Cast (50% plus)
    Documentaries: narrator/actors (if significant dramatic recreations)
    1
    C7 - Key Production Staff (1 point if 2 of the key production staff are qualifying, 2 points if 3 of the key production staff are qualifying)
    Drama: lead cinematographer, lead production designer or art director, lead editor, lead digital/visual/special effects supervisor
    Documentaries: lead camera, lead editor, lead researcher and one of lead/field sound recordist or sound designer or sound mixer or sound editor
    Animation: animation director, lead layout supervisor, lead production designer, lead character designer, lead editor, lead sound designer, lead visual effects supervisor, lead modelling supervisor
    2 (0 - 2)
    C8 - Majority of Crew (50% plus) 1
    Total - Section C (minimum: 3pts from C1 - C3) 13
    D - New Zealand Businesses  
    D1 - Ownership of Intellectual Property 1
    D2 - Business development outcomes including ownership of applicant company, rights of recoupment, sources of financing 1
    Total - Section D 2
    Total - minimum 20 points __ (out of 32)
  • General Principles

    Assessment of significant New Zealand content for the purposes of the New Zealand Grant is intended to support the objectives of the New Zealand Grant, while ensuring consistency with the requirements of the New Zealand Film Commission Act 1978.

    The New Zealand Grant is focused on industry development and cultural outcomes. The purpose of the New Zealand Grant is twofold:

    • to build the sustainability, scale and critical mass of the domestic industry, and support the development of New Zealand creatives
    • to provide cultural benefits to New Zealand by supporting the creation of New Zealand content and stories.

    The points framework and guidelines have been designed to reflect the special importance of on-screen New Zealand content - in terms of New Zealand characters, locations, stories, and historical and cultural elements - in defining a New Zealand production.

    Identifiable New Zealand on-screen elements are, in general, important to the uniqueness of New Zealand production. They are of particular significance in the expression and development of New Zealand's culture and identity, and reflecting situations and experiences unique to New Zealand, for the benefit of both New Zealand and international audiences. It is intended that most New Zealand Productions in particular will display strong New Zealand on-screen elements.

    It is, however, intended that a production could be considered to have significant New Zealand content for the purposes of the New Zealand Grant, while having no identifiable New Zealand setting, characters or other cultural elements. It is not the intention of assessment to restrict film-makers' creativity by limiting them solely to New Zealand settings and situations. Where this is the case the production will need to have:

    • strong New Zealand creative input or underlying material; and
    • high levels of New Zealand production activity and film-maker input.
  • Section A - New Zealand Subject Matter

    A1 - Setting

    Up to 3 points will be awarded for the New Zealand setting of a screen production, on the following basis:

    • 3 points can be awarded if at least 75% of the production is set in New Zealand.
    • 2 points can be awarded if at least 50% of the production is set in New Zealand.
    • 1 point can be awarded if at least 25% of the production is set in New Zealand.

    A screen production is set in New Zealand if the story takes place in New Zealand (regardless of actual location of shooting). A fictionalised version of New Zealand (that is still clearly identifiable as a New Zealand setting) will be considered a New Zealand setting.

    This will be measured by the proportion of the final production (in terms of number of minutes of on-screen content) that take place in New Zealand.

    FAQ: If I shoot my production in New Zealand does this mean it has a ‘New Zealand setting’?

    If I shoot my production in New Zealand does this mean it has a ‘New Zealand setting’?

    For the purposes of meeting Section A1 of the Significant New Zealand Content test, the setting must be identifiable as a New Zealand setting. Not all productions shot in New Zealand will have a New Zealand setting. For example, the setting in Slow West is NOT a New Zealand setting. However, the settings in Boy and The Dead Lands are New Zealand settings. A fictionalised version of New Zealand, that is still clearly identifiable as a New Zealand setting, will be considered a New Zealand setting. The proportion of a film that is set in New Zealand is measured by the estimated number of on-screen minutes that that setting is shown (this is assessed by reading the script at the provisional application stage and by reference to the completed film at final application stage).

    A2 - Lead Characters

    Up to 3 points will be awarded depending on the number of lead characters that are New Zealand characters, as follows:

    • 3 points can be awarded if two or more of the three lead characters are New Zealand characters, or if there are only two lead characters and they are both New Zealand characters.
    • 2 points can be awarded if one of the two lead characters is a New Zealand character.
    • 1 point can be awarded if one of the three lead characters is a New Zealand character.

    A character is a New Zealand character if he or she is identifiable as a New Zealand citizen or a New Zealand resident in the screen production.

    Where it is not immediately apparent from the film, applicants will be asked to explain why the character should be regarded as a New Zealand character. It is not enough that a person is technically a New Zealand character (e.g. via dual nationality or other artifice) - there must be other evidence in the film that the character is a New Zealand character, e.g. back-story, accent, residence etc.

    Where the residency and/or citizenship of the character is shown to change in the course of the film, or the character is a past New Zealand resident only, the applicant will be asked to justify why, on balance, the character should be considered a New Zealand character. In general, a character should be a New Zealand citizen or resident for the majority of his or her time on screen in order to be considered a New Zealand character.

    The main characters will be determined by taking account of centrality and prominence of the character in the story. Applicants will be asked to identify the main characters and make the case for a character's centrality and prominence in the story.

    For a documentary only: this may include the presenter and the subject/s or other contributors on screen.

    A3 - Creative Material

    This section refers to the creative material upon which the story of the production is based as opposed to the actual script, screenplay or teleplay (unless the story is only expressed in an original script, screenplay or teleplay.

    3 points will be awarded if the production:

    • is from an original screenplay by a New Zealand citizen or permanent resident; or
    • is based on a book, story, article, play etc written by a New Zealand citizen or permanent resident; or
    • is based on an original concept by a New Zealand citizen or permanent resident.

    Where it can be demonstrated that a project has a significant creative connection with New Zealand by originating in New Zealand and/or being developed by New Zealand citizens or residents (the applicant must demonstrate a meaningful and substantial New Zealand involvement in the development and where the story is an adaptation, the adapted screenplay is written by a New Zealand citizen or resident), then up to 3 points may be awarded depending on the level of involvement of New Zealand citizens or residents. If the original concept for a screen production is not by a New Zealand citizen or resident, then the maximum points available in this section is 2 points.

    Where there is more than one screenwriter for an original or adapted screenplay, or where other underlying creative material is co-authored, points will be allocated according to the proportion of New Zealand creative material, on the following basis:

    • 1 point can be awarded if at least 25% of the total underlying material is written by a New Zealand citizen or permanent resident;
    • 2 points can be awarded if at least 50% of the total underlying creative material is written by a New Zealand citizen or permanent resident;
    • 3 points can be awarded if at least 75% of the total underlying creative material is written by a New Zealand citizen or permanent resident.

    In all cases, the guild-approved credits granted to the New Zealand citizen or permanent resident and chain of title documents will be taken into account when determining the appropriate amount of points.

    A4 - Subject Matter and Contribution to New Zealand Culture or History

    The intention of this section is to reward and encourage film-making that reflects specific New Zealand issues, perspective, subjects, culture and/or historical context.

    Up to 2 points will be awarded for the subject matter and contribution to New Zealand culture or history of a screen production, on the following basis:

    • 1 point can be awarded to productions featuring high levels of historical content of specific relevance to New Zealand.
    • 1 point can be awarded to productions featuring subject matter or issues of particular relevance to New Zealand or New Zealand citizens or residents.

    Applicants claiming points in this section will be requested to provide justification as to why they believe the points should be awarded.

    Historical Content: This point will be awarded to productions that successfully show that, to a significant degree, they incorporate portrayals of historical events, issues or personalities that are of particular relevance to New Zealand. A production's story does not necessarily have to be set in New Zealand or feature New Zealand characters to be awarded a point in this sub-section. Stories or factual content featuring, for example, early Polynesian or European explorers or related to the historical experience of New Zealand citizens or residents internationally, might successfully claim a point for New Zealand historical content.

    Subject Matter: This point will be awarded to productions featuring an investigation or thematic portrayal of issues, information or other subject matter considered to be of particular interest to New Zealand citizens or residents. In order to receive a point in this section, a production must do more than be simply set in New Zealand or feature New Zealand characters. There should be a portrayal of an issue of specific relevance to New Zealand/New Zealand citizens or residents. Examples might include: issues of ethnicity and diversity in a New Zealand context; depictions or exploration of cultural values or situations of particular relevance to New Zealand citizens or residents; exploration of a specific environmental or political context or issue of particular relevance to New Zealand; etc. A production does not necessarily have to be set in New Zealand or feature New Zealand characters to be awarded a point in this sub-section. Stories featuring, for example, a New Zealand perspective on an international issue or event, might successfully claim a point for New Zealand subject matter.

  • Section B - New Zealand Production Activity

    Except for Principal Photography, the amount of work on a film-making activity in this section will be calculated by the amount of expenditure on that work. This will include: where a person works on a film, where goods are supplied from and/or where the services are performed.

    Where expenditure on a film-making activity is split between activity inside and outside New Zealand then expenditure must be claimed in proportion to the location of that activity.

    Information regarding the ownership of any equipment and technical facilities used by an applicant to claim points under this section may be requested.

    Any New Zealand living expenses of persons directly engaged in a production's work and incurred for the purposes of production (e.g. staying in a hotel in New Zealand) should be counted towards activity inside New Zealand.

    B1 - Shooting - Location/Studio

    Up to 2 points will be awarded for the location and/or studio shooting carried out in New Zealand, on the following basis:

    • 1 point can be awarded if at least 50% of the location and/or studio shooting is carried out in New Zealand.
    • 2 points can be awarded if at least 75% of the location and/or studio shooting is carried out in New Zealand.

    Location/Studio shooting includes Principal Photography at any studio, location, warehouse or other place where filming takes place. It does not include any shooting done by second or other units or any re-shoots that take place after so-called “wrap” of Principal Photography. It will be measured by reference to the number of days spent on the work as set out in the shooting schedule. In this instance, Principal Photography means the period of time during which the main shooting of the production takes place. It is expected that certain key shooting cast and crew (such as the director, director of photography, key cast, hair and make-up, continuity) will be present.

    B2 - Picture Post-Production and Digital/Visual Effects

    Up to 2 points will be awarded for picture post-production and digital/visual effects on the following basis:

    • 1 point can be awarded if at least 50% of the picture post-production and digital/visual effects budget is QNZPE.
    • 2 points can be awarded if at least 75% of the picture post-production and digital/visual effects budget is QNZPE.

    Picture post-production includes the following activities. It does not include dailies or activities normally carried out on-set during the Principal Photography period:

    • Picture editorial
    • Digital Intermediates (including TV online/colour sessions)
    • Graphics, idents, textless backgrounds
    • Main, end and textless titles
    • Master exports
    • Creation of master picture delivery items (not including distribution copies), data management and movement (provided the cost of data movement is charged to a New Zealand entity and the data originates from New Zealand)
    • Film scanning/telecine
    • Stereoscopic 3D conversion

    Picture post-production also includes the following film laboratory activities:

    • Film recording
    • Film restoration and repair
    • Titles, credits
    • Stills manipulation
    • Grading/colour timing
    • Negative inspection, negative pulling, cutting, logging, assembly cutting and pulling and assembling of scan rolls
    • Film/digital opticals
    • Creation of master film delivery items, e.g. interpositives and internegatives (not including distribution copies)
    • Digital negative developing, processing and print from digital negative

    Visual Effects Production includes:

    Visualisation

    • Research and development for visual effects technology used by and charged to the production
    • Visual effects design (including concept art and photographing and/or scanning of physical models by the VFX supplier to use as VFX reference)
    • Visual effects planning, supervision, management and integration into production
    • 3D storyboards outlining placement, movement, shape and elements needed for the completion of VFX shots including for pre-visualisation, technical visualisation or post-visualisation

    VFX Photography and Data Capture

    • Virtual camera including motion capture, performance capture or facial capture (see note 1 below)
    • Creation, shooting and delivery of models and miniatures
    • Creation, shooting and delivery of animatronics
    • Aerial plates
    • Green/blue screen photography not involving principal cast or the main unit director used for the purposes of supporting visual effects and other than Principal Photography
    • Plates/elements including but not limited to background, crowd/extras, specialist prosthetics, pyrotechnics and fire, lightning, smoke, dust, water and clouds
    • On-set data capture (including environment, prop, human and creature capture) such as 3D scanning and processing of captured data
    • Virtual studio and sets

    CGI/2D/3D

    • 2D and 3D animation (see note 1 below)
    • Digital creatures
    • Digital doubles
    • Digital environments
    • Other digital effects
    • Rotoscoping
    • Digital matte painting
    • Compositing
    • Film treatment and restoration
    • Wire effects removal
    • Editing and grading

    NOTE 1: For the avoidance of doubt, all costs relating to motion/performance/facial capture and animation activities are QNZPE even if they are incurred during Principal Photography.

    For animation only: Work on shooting, visual design, and layout and storyboarding, will also be eligible.

    B3 - Music Recording, Voice Recording, Sound Post-Production

    1 point can be awarded if at least 50% of the total budget for music, voice recording activities and/or sound post-production is QNZPE.

    Music includes composing, scoring, performing and recording but does not include source music. The performing and recording of the following qualify: a new piece of music composed for the film; or a new arrangement/score of an existing piece of music, created specifically for the film.

    Sound post-production includes:

    • Sound and music editorial
    • ADR/voiceover recording including remote ADR/voiceover recording including but not imited to ISDN connections provided the cost is charged to a New Zealand entity
    • Sound design including any additional sound recording recorded by a sound editor
    • Sound tracklay
    • Foley effects and recording
    • Sound mixing/re-recording (not including international versioning for distribution)
    • Creation of master sound delivery items (not including distribution copies or nternational versioning)

    NOT INCLUDED: Proprietary licence fees e.g. Dolby.

    For animation only: Work on voice recording will also be eligible. 1 point will be awarded if at least 50% of the work on this activity is carried out in New Zealand.

    B4 - Concept Design and Physical Effects

    For productions where Concept Design and Physical Effects are a significant part of the production e.g. genre or period, 1 point can be awarded if at least 50% of the total budget for Concept Design and Physical Effects is QNZPE.

    For the purposes of this section of the test, Concept Design and Physical Effects includes creature design, special effects, mechanical effects, specialist prosthetics, models, special props and costumes supplied by specialist companies rather than by the crew working on the production e.g. art department crew. It does not include fees for the production designer or for personnel in art department, wardrobe or hair and make-up.

  • Section C - New Zealand Personnel

    For the purposes of this test, a qualifying person means a citizen or a permanent resident of New Zealand.

    To qualify, a person must be a qualifying person at the time the film was being made. If a person holds dual nationality he/she may choose either nationality for the purpose of the test.

    C1 - Director

    2 points can be awarded if the director is a qualifying person.

    Where there are multiple directors (for example for a series of episodes):

    • 1 point can be awarded if at least 33% of the directors are qualifying persons or 33% of the episodes are directed by qualifying persons;
    • 2 points can be awarded if at least 66% of the directors are qualifying persons or 66% of the episodes are directed by qualifying persons.

    Where there is more than one director for a feature film or single episode programme, applicants will be asked to make a case for who is the lead director, except where there are joint and equal directors in which case an applicant may choose either to be the lead.

    The lead director will be determined by taking into account factors including: the person who takes the credit in the production, the creative input and time spent working on the film.

    C2 - Producer

    2 points can be awarded if at least one of the producers (or, if there are more than three, one of the three lead producers) is a qualifying person.

    Where there is more than one producer, applicants will be asked to make a case for who are the lead producers. A producer is defined as an individual with decision-making authority who plays an active role throughout the pre-production, production and post-production of a production and assumes responsibility for the physical process of production and carrying through practical and financial arrangements for the making of the production. For feature films, executive producers and associate producers will generally not be considered lead producers. For television series, executive producers may be considered lead producers.

    The lead producer will be determined by taking into account factors including: the person who takes the credit in the production, the creative input and time spent working on the production. Producers for television series, line producers and unit production managers are considered under C4.

    C3 - Scriptwriter

    2 points can be awarded if the scriptwriter is a qualifying person.

    Where there are multiple scriptwriters (for example for a series of episodes):

    • 1 point can be awarded if at least 33% of the scriptwriters are qualifying persons or 33% of the episodes are written by qualifying persons;
    • 2 points can be awarded if at least 66% of the scriptwriters are qualifying persons or 66% of the episodes are written by qualifying persons.

    Applicants will be asked to make a case for who are the scriptwriters.

    A scriptwriter will be determined by taking into account factors including: the person who takes the credit in the film, creative input on the script and time spent working on the script.

    C4 - Composer/Source Music

    1 point can be awarded if:

    • the composer is a qualifying person (or, if there is more than one composer, the lead composer) is a qualifying person; or
    • more than 50% of the source music for the film is by qualifying persons.

    Where there is more than one composer, applicants will be asked to make a case for who is the lead composer, except where there are joint and equal composers in which case an applicant may choose either to be the lead.

    The lead composer will be determined by taking into account factors including: the person who takes the credit in the film, the creative input on the original music score (not including source music) and time spent working on the score.

    If applicants wish to receive the point for source music for the film (rather than the composer), they will be asked for evidence as to the New Zealand status of the source music.

    C5 - Lead Actors

    2 points will be awarded for New Zealand lead actors, on the following basis:

    • 1 point can be awarded if one of the lead actors is a qualifying person.
    • 2 points can be awarded if two of the lead actors are qualifying persons.

    Applicants will be asked to make a case for who are the lead actors.

    The lead actors will be determined by taking into account factors including: the number of days worked in front of the camera and the centrality of the actor's role in the film.

    For animations only: this will include actors voicing characters.

    For documentaries only: this will include the narrator and actors that perform in any dramatic recreations provided the recreations form a significant part of the documentary and the actor's role is prominent in the recreations.

    C6 - Majority of Cast

    1 point can be awarded if at least 50% of the cast are qualifying persons.

    ‘Cast' means all the actors and performers (including stunt men and women) but not extras that appear in the film.

    For the purposes of this test, ‘extras' means: a person who appears in a film where a non-specific, non-speaking character is required, usually as part of a crowd or in the background of a scene.

    For animations only: this will include actors voicing characters.

    For documentaries only: this will include the narrator and actors that perform in any dramatic recreations provided the recreations form a significant part of the documentary and the actor's role is prominent in the recreations.

    C7 - Key Production Staff

    Up to 2 points will be awarded for key production staff, on the following basis:

    • 1 point can be awarded if two of the key production staff are qualifying persons.
    • 2 points can be awarded if three of the key production staff are qualifying persons.

    Key production staff are: the lead cinematographer, the lead production designer or art director, the lead editor, and the lead digital/visual/special effects supervisor.

    For documentaries only, the key production staff are: the lead camera person, the lead editor, the lead researcher and one of the lead/field sound recordist or the sound designer or the sound mixer or the sound editor.

    For animations only, the key production staff are: the animation director, lead layout supervisor, the lead production designer, the lead character designer, the lead editor, the lead sound designer, the lead visual effects supervisor and the lead modelling supervisor.

    C8 - Majority of Crew

    1 point can be awarded if at least 50% of the production crew are qualifying persons.

    Production crew means all the people directly involved in the production of a film that do not appear in the film. That is, people involved directly in the production and post-production of the film but not people involved in providing ancillary services e.g. caterers.

    Whether a person is in the production crew will be determined by taking into account factors including: if he or she is contracted by the production company to perform services on the film; and if he or she have industry-standard on-screen credits.

  • Section D - New Zealand Businesses

    D1 - Ownership of Intellectual Property

    1 point can be awarded for New Zealand ownership of intellectual property, if at least 50% of the intellectual property in the production is owned by New Zealand residents. Intellectual property includes copyright as well as the right to exploit the screen production or intellectual property associated with screen production.

    D2 - Business Development Outcomes

    1 additional point may be awarded, at the discretion of the NZSPG Panel, for business development outcomes based on:

    • The extent to which New Zealand citizens or permanent residents have management and control of the lead production company;
    • The extent to which New Zealand equity investors, including producers with “NZSPG equity” have a recoupment position equivalent to other equity investors;
    • The potential for the New Zealand producer to achieve significant business growth out of the production.