NZSPG Criteria New Zealand

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1 July 2017

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 July 2017 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 are advised to refer to the NZSPG Criteria for International Productions to see whether they are eligible for an International Grant.

    To be eligible to receive the New Zealand Grant, an applicant must comply with New Zealand law (including health and safety law) in respect of all the applicant’s activities in New Zealand and in respect of any activities not undertaken in New Zealand but otherwise subject to New Zealand law.

    By submitting an application in respect of the New Zealand Grant, the applicant agrees to be bound by the terms of the NZSPG Criteria for New Zealand Productions.

  • 2. Definitions

    Definitions of terms used in these criteria are set out in Appendix 1.

  • 3. Purpose and intent

    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 expected that only experienced producers will apply for a New Zealand Grant. Applications must 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 purpose or intent of the criteria, can be rejected by the NZSPG Panel in its sole discretion.

  • 4. Exercise of discretion

    Where in these criteria there is a reference to the exercise of a discretion by the NZFC or the NZSPG Panel, the exercise of that discretion by the NZFC or the NZSPG Panel (as the case might be) will be undertaken acting reasonably and in good faith, having regard to the circumstances of that application, all information about the applicant and the production available to the NZFC or NZSPG Panel (as applicable) and the purpose and intent of the criteria. Neither the NZFC nor the NZSPG Panel will be under any obligation to exercise its discretion in a manner favourable to the applicant. Nor will the NZFC or the NZSPG Panel be bound by previous exercise of the same discretion in respect of other applications.

  • 5. Amount of 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 per production.

    The total maximum New Zealand Grant is $20 million per production.

    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 5.

  • 6. Effective date, transitional provisions and historical costs

    Effective date

    These criteria are effective from 1 July 2017.

    Transitional provisions

    New Zealand Productions that start Principal Photography before 1 July 2017 will be assessed under the NZSPG Criteria for New Zealand Productions dated 1 August 2015.

    New Zealand Productions that start Principal Photography on or after 1 July 2017 will be assessed under these criteria.

    These criteria have some stricter requirements than the criteria dated 1 August 2015 and therefore transitional arrangements apply in the following circumstances:

    If the applicant has applied to the NZFC for a Provisional Certificate and has received an acknowledgement letter confirming that the application is complete, on or before 30 June 2017, and that application for a Provisional Certificate is subsequently approved, the application will be considered under the NZSPG Criteria for New Zealand Productions dated 1 August 2015. There will be no extensions to a Provisional Certificate granted under this clause.

    If a Provisional Certificate is granted under this clause and the applicant has started Principal Photography before the Provisional Certificate has expired, the final application in respect of that production will also be assessed under the NZSPG Criteria for New Zealand Productions dated 1 August 2015.

    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 entered into.

    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, the applicant must apply for a Provisional Certificate and the NZSPG Panel will determine, at its sole discretion, taking into account the current status of the production, whether there are exceptional circumstances that allow these costs to be claimed as QNZPE.

  • 7. Eligibility for New Zealand Grant

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

    1. register with the NZFC, on the registration form, in the timeframe stated in clause 25 or apply for a Provisional Certificate;

    2. satisfy all of the requirements of the criteria (except to the extent that the NZFC or NZSPG Panel exercise a discretion in the criteria to waive a requirement);

    3. provide all information the applicant is required to provide to the NZFC or the NZSPG Panel under the criteria and the relevant application form; and

    4. conform with the purpose and intent of the New Zealand Grant.

    To be eligible for an Additional Grant, productions and applicants (including Official Co-productions) must be eligible for a New Zealand Grant and must also satisfy the additional requirements in Appendix 4.

    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. A production must achieve a minimum of 20 points to qualify as having significant New Zealand content, unless it is an official co-production, which are deemed to have Significant New Zealand Content by section 18(2A) of the New Zealand Film Commission Act 1798. This means that official co-productions do not need to pass the Significant New Zealand Content points test. However, an official co-production must still pass the Significant Cultural Benefits Test to receive the Additional Grant.

Visual Overview of the New Zealand Grant

  • Applicants should also refer to Section 5 of the criteria (Application Process)
    Applicants should note the requirement to either register with the NZFC or apply for a Provisional Certificate (applicants applying for the Additional Grant must apply for a Provisional Certificate). An application fee may be payable for making an application for the New Zealand Grant.

    Visual Overview of the New Zealand Grant

Section 2a – Specific Eligibility Criteria

  • 8. Feature films

    8.1Format

    1. An eligible feature film is a production that is not excluded under clause 8.1(b) and is:

      1. commonly screened as the main attraction in commercial cinemas;

      2. not less than 60 minutes, or in the case of a large format (IMAX) film not less than 40 minutes;

      3. 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, can be eligible if the production meets the requirements of clause 9.

    2. 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. an advertising programme or commercial;

      2. a discussion programme, current affairs programme, news programme, panel programme, or a programme of a like nature;

      3. pornography;

      4. a training programme;

      5. an interactive digital game (other than transmedia content as per clause 16.3(b)(iv)); or

      6. a production of a public event, including a sports event.

    8.2Expenditure 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 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 (Total Production Expenditure) is defined in Appendix 2 of the Criteria. It is essentially the total production budget (worldwide) less certain excluded costs.

    8.3Significant 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 a New Zealand Grant of up to $15 million of QNZPE.

    To be eligible for the Additional Grant, a feature film (including an Official Co-production) must also pass the Significant Cultural Benefits Test.

    8.4New 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 any other non-commercial release. It excludes test screenings, free or charitable screenings, and in most cases film festival screenings (as such terms are commonly understood in the New Zealand screen production industry).

    To be eligible for a Provisional Certificate, an application must include:

    • an audience engagement plan setting out how the feature film will be seen by audiences in New Zealand; and

    • a firm offer letter or deal memo from a recognised theatrical distributor (as determined by the NFZC in its sole discretion), with strong commitment for a New Zealand release that demonstrates that the audience reach will be commensurate with the expected amount of the New Zealand Grant.

    To be eligible for a Final Certificate, an application must include:

    • a current audience engagement plan setting out how the feature film will be seen by audiences in New Zealand. If an applicant has applied for a Provisional Certificate, the audience engagement plan provided with the application for a Provisional Certificate must be updated for the final application; and

    • a fully-executed, bone fide, legally binding long form New Zealand distribution agreement from a recognised theatrical distributor (as determined by the NFZC in its sole discretion), with strong commitment for a New Zealand release, within 2 years of Completion, that demonstrates that the audience reach will be commensurate with the expected amount of the New Zealand Grant. Demonstration of audience reach can include, for example, a guaranteed cinema-release of a certain scale.

    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 means that the production must have a distribution deal with a likely audience reach 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?

    You do not need to have a fully executed long form distribution agreement to apply for a provisional certificate. However, you must have a genuine legally binding deal memo for distribution of the production that demonstrates the audience reach of the production will be commensurate with the expected amount of the New Zealand Grant (e.g. for films, the number of screens and cities, P&A spend etc.). You must also provide an audience engagement plan setting out how the production will be seen by audiences in New Zealand (refer to the information sheet for details). You cannot apply for a provisional certificate until you have met these requirements.

    FAQ: Can I distribute a feature film myself?

    Can I distribute a feature film myself?

    Refer to Clause 8.4 of the Criteria

    The Criteria requires that, by time of final certification, the production must have secured a legally binding distribution agreement with a recognised theatrical distributor to release the film commercially as the main attraction in New Zealand cinemas. Unless the applicant is a recognised theatrical distributor an application for self-distribution is likely to be declined.

    8.5Non-New Zealand Government Production 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 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. 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%, an applicant can apply to the NZSPG Panel for a waiver of this requirement. A waiver application will be determined at the NZSPG Panel’s sole discretion, taking into regard any evidence as to whether or not the intention to fund was genuine.

    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?

    At provisional application stage, you need to provide evidence that the non-New Zealand funding requirement will be met. You must show that either:

    • there is a genuine intention from one or more non-New Zealand Government entities or persons to fund, in aggregate, 10% or more of the production budget, evidenced by a signed letter of offer, deal memo or funding agreement; or
    • 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.

    If, after you have been issued a provisional certificate, the circumstances of the production change and the proportion of non-New Zealand Government Production Funding drops below 10%, you can apply to the NZSPG Panel for a waiver of this requirement. For more information, see Clause 8.5 of the Criteria.

    8.6Other New Zealand Government funding

    A feature film can 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 cannot receive a New Zealand Grant and an International Grant.

    A production can 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 can receive New Zealand government development funding or other non-production funding and a New Zealand Grant.

  • 9. Television and other non-feature films

    9.1Format

    1. An eligible television or other non-feature film is a production that is not excluded under clause 9.1(b), is recorded, subtitled or dubbed in one of New Zealand’s official languages, and is either:

      1. 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 and including but not limited to drama, documentary, factual, reality, children’s and animation;

      2. 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. 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

      is shot and processed to commercial technical distribution standards and intended to be released on a distribution platform other than cinema. Distribution platforms include all forms of television, DVD/Blu-ray, internet, video-on-demand, mobile phone or any other public mass distribution medium device.

    2. 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. an advertising programme or commercial;

      2. a discussion programme, current affairs programme, news programme, panel programme, or a programme of a like nature;

      3. pornography;

      4. a training programme;

      5. an interactive digital game (other than transmedia content as per clause 16.3(b)(iv));

      6. a production of a public event, including a sports event; or

      7. 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.

    9.2Expenditure 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. duration of production in hours means the total length of the production measured in hours; and

    2. 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.

    9.3Significant 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 a New Zealand Grant of up to $15 million of QNZPE.

    To be eligible for the Additional Grant, a television or other non-feature film production (including an Official Co-production) must also pass the Significant Cultural Benefits Test.

    9.4New Zealand distribution

    A television or other non-feature film production must have a secure confirmed commercial agreement for distribution on an appropriate platform, whereby access to the production is available in New Zealand. The commercial agreement for distribution 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 via a new media platform (such as online or mobile content) accessible to people in New Zealand.

    To be eligible for a Provisional Certificate, an application must include:

    • an audience engagement plan setting out how the television or other non-feature film production will be seen by audiences in New Zealand; and

    • a firm offer letter or deal memo from a recognised broadcaster or commercial distributor (as applicable and as determined by the NFZC in its sole discretion), with strong commitment for a New Zealand release that demonstrates that the audience reach will be commensurate with the expected amount of the New Zealand Grant.

    To be eligible for a Final Certificate, an application must include:

    • a current audience engagement plan setting out how the television or other non-feature film production will be seen by audiences in New Zealand. If an applicant has applied for a Provisional Certificate, the audience engagement plan provided with the application for a Provisional Certificate must be updated for the final application; and

    • a fully-executed, bone fide, legally binding long form New Zealand broadcast licence or distribution agreement from a recognised broadcaster or commercial distributor (as applicable and as determined by the NFZC in its sole discretion), with strong commitment for a New Zealand release, within 2 years of Completion, that demonstrates that the audience reach will be commensurate with the expected amount of the New Zealand Grant. Demonstration of audience reach might include, for example, a broadcaster covenant to screen a certain number of times on a certain channel, within a specified time-slot.

    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 means that the production must have a distribution deal, or TV network with a likely audience reach 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 9.4 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.

    9.5Non-New Zealand Government Production Funding threshold

    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 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. 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%, an applicant can apply in writing to the NZFC for a waiver of this requirement. A waiver application will be determined at the NZSPG Panel’s sole discretion, taking into regard any evidence as to whether or not the intention to fund was genuine.

    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?

    At provisional application stage, you need to provide evidence that the non-New Zealand funding requirement will be met. You must show that either:

    • there is a genuine intention from one or more non-New Zealand Government entities or persons to fund, in aggregate, 25% or more of the production budget, evidenced by a signed letter of offer, deal memo or funding agreement; or
    • 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.

    If, after you have been issued a provisional certificate, the circumstances of the production change and the proportion of non-New Zealand Government Production Funding drops below 25%, you can apply to the NZSPG Panel for a waiver of this requirement. For more information, see Clause 9.5 of the Criteria.

    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.

    9.6Market attachments

    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, for the screening or broadcast of the production itself and where there is no entitlement to share in the net receipts from the production in respect of that sales advance, distribution advance or licence fee. Equity and loans cannot qualify as market attachments. Any market attachments must be from parties unrelated to the applicant and from bona fide screen production sales agents, distributors or broadcasters.

    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: 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 where there is no right to share in the net receipts from the production in respect of that advance or fee. 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.

    Please note that market attachments must be from parties unrelated to the applicant and must be from bone fide screen production sales agents, distributors or broadcasters.

    9.7Other New Zealand Government funding

    A television or other non-feature film production can NOT receive production funding (but can 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 can 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 cannot receive a New Zealand Grant and an International Grant.

    A production can 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 can receive New Zealand government development funding or other non-production funding and a New Zealand Grant.

    The expenditure thresholds for television and other non-feature film productions are lower than those required for a feature film. The NZSPG Panel will reject any applications where the NZSPG Panel determines, in its sole discretion, that an application made in respect of a television or other non-feature film production ought properly be regarded as a feature film.

Section 2b – General Eligibility Criteria

  • 10. Special Purpose Vehicle

    10.1Applicant to be SPV

    An applicant must be a special purpose vehicle (SPV) established principally in relation to making the production. The applicant must have its 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 IRD 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.

    10.2Exceptions

    An applicant is not required to be a SPV if one of the following exceptions applies:

    1. 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 can 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 can 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 can be re-used for each production provided that separate tax locations* and a separate bank account must be used for each series or season.

    2. 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) in respect of that previous production. In this case, the applicant’s existing GST and payroll registration numbers and bank account can 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 can be included in those returns but this expenditure must be clearly identified and excluded from QNZPE.

    *An applicant must contact 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.

    Applicants who wish to rely on an exception under this clause 10.2 must apply to the NZFC for confirmation that the applicant meets the requirements of the exception relied upon. Applications must include such information as is reasonably required by the NZFC to make a determination under the exception.

  • 11. Residency status

    11.1Residency of applicant

    An applicant must be either:

    1. a New Zealand company, which in this clause 11.1 means that the company:

      1. is incorporated in New Zealand; and

      2. carries on business in New Zealand; and

      3. has either its central management or control in New Zealand, or its voting power controlled by shareholders who are New Zealand Residents, or in the case of individual shareholders, who are Citizens or New Zealand Permanent Residents; or

    2. a New Zealand resident partnership (a partnership is a New Zealand resident if a majority of the partners in the partnership are New Zealand 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 In line with this purpose, where the applicant is majority-owned by another company (e.g. the applicant is an SPV), the majority-owner must meet the same residency requirements. See Clauses 11.1 - 11.3 of the Criteria.

    11.2Majority owner

    Where the applicant is majority-owned by another company, the majority owner must also meet the criteria in clause 11.1.

    11.3Ongoing engagement

    An applicant or, where the applicant is a SPV, the majority owner of that SPV, must satisfy the NZSPG Panel (in its sole discretion) that the applicant or the majority owner of the applicant SPV has been actively engaged in the business of film or television production in New Zealand to a significant extent for a period of at least 18 months prior to the date on which Principal Photography is scheduled to start.

    Where the applicant or SPV is owned by an individual (rather than by a company), and the NZSPG Panel is satisfied (in its sole discretion) that the individual has been actively engaged in the business of film or television production in New Zealand to a significant extent for a period of at least 18 months prior to the date at which Principal Photography is scheduled to start, the NZSPG Panel can, at its sole discretion, accept an application as eligible under this clause 11.3.

  • 12. 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 can be 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. pre-production activities in relation to the production;

    2. production activities in relation to the production;

    3. post-production activities in relation to the production; and

    4. any other activities undertaken to bring the production up to the state where it could reasonably be regarded as ready to be distributed, broadcast or exhibited to the general public.

  • 13. Other grants

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

  • 14. Producer’s income

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

    The NZSPG Panel can request evidence that the applicant is entitled to receive a share of income from the production that is commensurate with the expected value of the New Zealand Grant. If the NZSPG Panel is not satisfied that the applicant is entitled to a share of income commensurate with the expected value of the New Zealand Grant or is not satisfied that the production’s recoupment structure is consistent with the purpose and intent of the New Zealand Grant, the NZSPG Panel can reject the application.

    The requirements of this clause 14 apply regardless of whether the NZSPG is used in the production’s budget.

    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 exploitation of the production that is commensurate with the expected value of the Grant (often referred to as the NZSPG equity). The applicant must be entitled to both a recoupment position and a profit position in respect of the NZSPG Equity. The NZSPG Panel may request evidence that this requirement will be met. NZSPG equity must be recoupable in a similar position to other equity investors. For example, if the NZSPG equity is 20% of the total equity, we would expect the producer to have a recoupment right in a position that is equal with other equity investors in the film and entitles the applicant (or parent company) to a 20% share 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. Applicants should be aware that assigning part of this right to third parties (other than cast or crew) may affect the NZSPG Panel’s assessment of whether the recoupment requirements are met. See Clause 14 of the Criteria.

    Income earned by producers from successful productions helps create a sustainable New Zealand screen production industry. The New Zealand Government requires that all New Zealand Grant recipients have an equity share in the production so that they can reinvest in the New Zealand screen sector.

Section 3 – Qualifying New Zealand Production Expenditure (QNZPE)

  • 15. 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 as early as possible to separate expenditure that is QNZPE from expenditure that is not QNZPE. Where necessary, invoices from a supplier must 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 relevant 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, in New Zealand dollars, QNZPE, non-QNZPE and for official co-productions only, TPE and exclusions from TPE.

  • 16. QNZPE

    16.1What is QNZPE?

    QNZPE is expenditure incurred by the applicant on the production that:

    1. falls within the definition in clause 16.2 (General QNZPE); or

    2. is listed as a specific inclusion in clause 16.3 (a specific inclusion); and

    3. is not specifically excluded under clause 16.4 (a specific exclusion).

    16.2General QNZPE definition

    Expenditure will qualify as General QNZPE if it is incurred by the applicant on the production, where that expenditure is incurred on, or is attributable to:

    1. goods purchased, hired or leased in New Zealand where those goods are sourced from within New Zealand; or

    2. the use of a good that is sourced from overseas, provided that:

      1. the NZSPG Panel reasonably considers that good is not otherwise available to the production in New Zealand; and

      2. that good is located in New Zealand at the time that the good is used in the making of the production; and

      3. that good is purchased, hired or leased in New Zealand from a New Zealand Resident who is a habitual supplier of those goods in New Zealand; or

    3. services provided in New Zealand; or

    4. the use of land located in New Zealand.

    16.3Specific inclusions

    The following expenditure will qualify as a specific inclusion where expenditure is incurred by the applicant on the production:

    1. New Zealand copyright acquisition

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

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

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

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

      Yes, provided 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. It is likely that the performer or composer of the sound recording was the original owner of the copyright in that recording.

      If the performer or composer is the original owner of the copyright and they are or were a New Zealand Resident, then licence fees for that recording payable to offshore record companies can be treated as QNZPE.

      *The definition of New Zealand Resident used in the Criteria refers to the definition of New Zealand resident in the Income Tax Act 2007. 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 intellectual property in the underlying software was created in New Zealand for use in the production or the original owner of the intellectual property is or was a New Zealand Resident, the costs can be claimed.

    3. 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. director or cast commentary tracks;

      2. ‘making of’ documentaries;

      3. material for extended versions;

      4. 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 material qualify as QNZPE?

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

      Yes, but only if the publicity and marketing services are provided and paid for in New Zealand before the completion of the production.

    4. Travel to New Zealand

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

      The cost of the direct outgoing and the direct incoming journey is QNZPE for New Zealand Residents who travel between New Zealand and another country for the purposes of the production.

      If a journey is not direct (e.g. it includes a stopover or a dog-leg) the NZSPG Panel will determine the cost of an equivalent direct journey and the cost determined by the NZSPG Panel will be the QNZPE for that journey.

    5. 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 that are attributable to their time in New Zealand working on the production 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.

    6. Production insurance

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

      For co-productions (official and un-official), only the nominal New Zealand portion of the cost of production insurance is QNZPE. The nominal New Zealand portion is calculated by multiplying the total cost of production insurance by the New Zealand Financing Percentage.

      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.

    7. 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).

      For co-productions (official and un-official), only the nominal New Zealand portion of completion bond fees is QNZPE. The nominal New Zealand portion is calculated by multiplying the total cost of completion fees by the New Zealand Financing Percentage.

    8. Principal Photography outside New Zealand

      The Remuneration and travel costs of New Zealand Residents and the costs of purchasing goods or services from New Zealand Residents are QNZPE where:

      1. the Remuneration 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. 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); and

      3. if the cost relates to the purchase of goods or services from a New Zealand Resident, the New Zealand Resident provides the goods or services.

      For the purposes of this clause 16.3(f), travel costs means only commercial airfares between New Zealand and another country, accommodation in another country and per diems, in each case for the purposes of the production.

    9. 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?

      No, on-the-ground travel costs within a foreign country are now excluded from QNZPE.

      You can claim as QNZPE expenditure on Remuneration, commercial airfares, accommodation costs, and per diems for New Zealand Resident cast and crew while they are providing services outside New Zealand during Principal Photography, provided these expenses meet the requirements of Clause 16.3(f) of the Criteria. Any costs incurred during prep or wrap days offshore are excluded from QNZPE. Where cast/crew have taken a long-haul flight (as that term is understood by the NZFC) costs associated with a “rest day” following that flight may be claimable as QNZPE.

    10. Financing Expenditure

      Financing Expenditure that:

      1. is paid to a New Zealand Resident that provides finance for the production; or

      2. 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. 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. 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 must 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 16.4(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.

    16.4Specific exclusions

    The following expenditure is a specific exclusion and will not qualify as QNZPE under any circumstances:

    1. Remuneration of non-cast personnel for short-term visits

      Remuneration and all other costs relating to the services of non-cast personnel who are not New Zealand Residents and who have not worked on the production in New Zealand for 14 or more days in total.

      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 Remuneration – meaning contractual entitlements to fees, accommodation, per diems, childcare and other allowances, 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 does not include any days off. For example, a 5-day shoot plus 2 days off count as 5 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. Acquisition or licensing of copyright

      1. If the original owner of copyright in a pre-existing work is not, or was not, a New Zealand Resident, the cost of acquiring or licensing copyright in that pre-existing work.

      2. If copyright in a work is not, or was not, created in New Zealand, the cost of commissioning and purchasing copyright (or an interest in copyright) in that work for use in the production.

      3. 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, in its sole discretion and on a case-by-case basis.

    3. Publicity and promotional costs incurred after Completion

      Publicity and promotional costs incurred after Completion of the production.

    4. 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. Advances

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

    6. Financing Expenditure cap

      Financing Expenditure above the caps in clause 16.3(g)(iii) and(iv)

    7. Business overheads cap

      Costs generally considered by the NZFC to be ‘business overheads’ above 5% of the QNZPE or $400,000 whichever is the lesser (and not determined by how any particular expenditure is categorised within a production’s budget).

      FAQ: How do I calculate the cap?

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

      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 $400,000, the total amount of overheads can be claimed. Should they equal more than 5% of the QNZPE or $400,000, only the amount up to 5% of the QNZPE or $400,000 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 (capped at 5% of the QNZPE or $400,000 whichever is lesser):

      • Deduct the claimed 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 $400,000). 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. 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 21 of the Criteria. Please note that all of the exceptions in clause 21.2 (unpaid interest, auditor’s fees and marketing or post-production costs) must be approved by the NZFC and the combined total (of interest, auditor’s fees and marketing or post-production costs unpaid at the time of making a final application) 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 21.1 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. 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 23 for the definition and treatment of a depreciating asset.

    10. Legal

      Legal fees that are NOT related to:

      1. the drafting and/or negotiation of production and financing documents; or

      2. legal advice on issues arising in the normal course of the making of a production.

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

    11. Unspent contingency

      Unspent contingency cannot qualify as QNZPE.

      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 on whether the production qualifies for the New Zealand Grant (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.

    12. Freight

      The cost of international freight (including excess baggage and freight within a country other than New Zealand).

    13. Guild payments

      Any payment to a screen industry guild or association or to any fund, trust or plan administered by a screen industry guild or association.

      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. However, any payments to overseas guilds or industry associations will not qualify as QNZPE.

    14. Overseas taxes

      Except for payments to the New Zealand Government, any payments made towards an applicant’s or a production’s tax obligations.

    15. Others

      Cast and Crew Perks, gifts, fines, Entertainment and Gratuities and any historical costs (see clause 6 for an explanation of historical costs).

      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 (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.

    16. Application fees

      Expenditure on any application fees in relation to the New Zealand Grant.

    17. Costs involved in taking over the production from a prior entity

      Any costs incurred by the applicant in taking over the production from a prior entity or entities.

    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. Unless captured by a “specific inclusion” in the Criteria (see Clause 16.3), expenditure attributable to a supplier performing any element of its services outside New Zealand will be excluded from QNZPE and must be separately identified in any invoices.

    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: 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 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.

    16.5Priority

    In the case of conflict, the exclusions will take priority. In other words, if any expenditure incurred by the applicant on the production:

    1. could qualify as General QNZPE or could qualify as a specific inclusion; and

    2. could also qualify as a specific exclusion,

    then the expenditure will be excluded from QNZPE.

Section 4 – Treatment Of Expenditure

  • 17. 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.

  • 18. 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.

  • 19. Currency exchange

    All production expenditure incurred and paid in a foreign currency must be converted into New Zealand dollars on a monthly basis at the mid-month exchange rate published on the IRD website for the month in which the payment was made.

    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. Please note that payments made in a foreign currency must be converted into New Zealand dollars on a monthly basis at the mid-month exchange rate published on the IRD website for the month in which the payment was made.

  • 20. 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 purpose or intent of the criteria, the application may be rejected by the NZSPG Panel in its sole discretion as per clause 3.

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

  • 21. 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 making a final application for the New Zealand Grant (for example, paid in cash, by cheque or electronic transfer). Credits must not be off-set against any QNZPE to be claimed on the production.

    This requirement does not apply where:

    21.1Fees or overheads held-back

    Where:

    1. part of the funding for the production (including any part of the expected New Zealand Grant that is not cashflowed to the applicant) is unpaid at the time of final application;

    2. this funding is required to meet the cost of the production;

    3. certain fees (that are otherwise QNZPE) have not been paid because they are being ‘held back’ pending receipt of such funding; and

    4. such fees are payable to producers, director/s or as a production entity overhead,

    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.

    21.2Interest, auditor’s fees and marketing or post-production costs

    Interest for any loan cashflowing the New Zealand Grant, auditor’s fees, marketing and/or post-production costs, in each case that are unpaid at the time of making a final application, can be included in QNZPE provided that:

    1. the amounts have been agreed with the NZFC and are no more than 1% in aggregate (across all interest, auditor’s fees, marketing and/or post-production costs in each case that are unpaid at the time of making a final application) of the total production budget;

    2. invoices for those amounts are provided to the NZFC as soon as reasonably possible after submission of the final application; and

    3. 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: How should I calculate accrued (unpaid) interest in QNZPE?

    How should I calculate accrued (unpaid) interest in QNZPE?

    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.

  • 22. Expenditure by prior entities

    An applicant that takes over the production from another entity (or entities) and completes the production (e.g. a completion guarantor), can be eligible for the New Zealand Grant. 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 those entities in order to qualify as QNZPE, provided the expenditure also qualifies under clause 16.

  • 23. Depreciating assets

    Where an applicant purchases an asset for use in the production, uses it to make the production and sells or disposes of that asset at Completion of the production or at completion of 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) can 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 IRD.

    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 or is deemed to be saleable, 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

    Further information about the treatment of depreciating assets under Subpart EE of the Income Tax Act 2007 can be downloaded from the IRD website at www.ird.govt.nz.

  • 24. 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 5 – Application Process

  • 25. Registration

    Applicants who do not make an application for a Provisional Certificate must use the then current version of the registration form provided on the NZFC website and have the production registered with the NZFC before the start of Principal Photography.

    An applicant that has not either registered or applied for a Provisional Certificate will not be eligible to make a final application for the New Zealand Grant.

    An application will only be considered registered when the applicant receives written confirmation of registration from the NZFC.

    FAQ: Do I need to register the production with the NZFC?

    Do I need to register the production with the NZFC?

    All applicants must either apply for provisional certification or have the production registered with the NZFC before the start of Principal Photography.

    If you have applied for a Provisional Certificate, then you do not need to register. If you have not applied for a Provisional Certificate, then you must register with the NZFC before the start of Principal Photography. Please note that you must use the then-current version of the registration form provided on the NZFC’s website.

    If you are not sure whether you will apply for a Provisional Certificate the NZFC recommends that you register with the NZFC, as registration is a simpler and faster process.

  • 26. Notification of changes in estimated QNZPE

    Applicants must inform the NZFC in writing as soon as practicable if, following registration or application for a Provisional Certificate, the estimated QNZPE for a production changes by $1 million or more.

    On a quarterly basis following registration or application for a Provisional Certificate, the NZFC and/or MCH may request information from the applicant, about the amount of estimated QNZPE incurred to date and forecast QNZPE to Complete.

  • 27. Application for a Provisional Certificate

    Before production has started, or at any time during production, an applicant can apply for provisional certification of eligibility for a New Zealand Grant (a Provisional Certificate).

    It is not mandatory for applicants applying only for the baseline New Zealand Grant (and not an Additional Grant) to apply for a Provisional Certificate. However, applicants are encouraged to apply for a Provisional Certificate in all cases, but only when financing is sufficiently advanced. In any case, applicants who do not apply for a Provisional Certificate must register with the NZFC, as set out in clause 25.

    Applicants (including Official Co-productions) who wish to apply for an Additional Grant must apply for a Provisional Certificate, using the then-current Additional Grant Provisional Certificate Application Form. Applicants who do not apply for a Provisional Certificate will not be eligible for an Additional Grant.

    Applicants are strongly advised to engage with the NZFC during the financing of the production if intending to apply for an Additional Grant.

    FAQ: Do I have to apply for provisional certification?

    Do I have to apply for provisional certification?

    All applicants must either apply for provisional certification or have the production registered with the NZFC before the start of Principal Photography.

    Applicants who wish to apply for an Additional Grant must apply for provisional certification.

    Applicants for the baseline New Zealand Grant are strongly advised to apply for provisional certification so that the NZFC can identify potential issues early on and notify applicants.

    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.

    A fee may be payable for making a provisional application.

    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 further application fee. The NZFC website will publish any application fee information.

    FAQ: Does the provisional certificate expire?

    Does the provisional certificate expire?

    Yes, a provisional certificate expires 6 months after the date of the provisional certificate unless the production has commenced Principal Photography within that timeframe. In exceptional circumstances you may apply to the NZFC for an extension, but you may be required to pay an extension fee.

    Alternatively, you can submit a new provisional application. An application fee may be payable.

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

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

    You do not need to have a fully executed long form distribution agreement to apply for a provisional certificate. However, you must have a genuine legally binding deal memo for distribution of the production that demonstrates the audience reach of the production will be commensurate with the expected amount of the New Zealand Grant (e.g. for films, the number of screens and cities, P&A spend etc., and for TV, the network, intended timeslot and likely audience). You must also provide an audience engagement plan setting out how the production will be seen by audiences in New Zealand (refer to the information sheet for details). You cannot apply for a provisional certificate until you have met these requirements.

    27.1Application requirements

    Applicants are eligible to apply for a Provisional Certificate where they are either:

    1. the production entity responsible for the making of the production; or

    2. 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 Certificate Application Form.

    27.2Nature of Provisional Certificate

    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. the production is an eligible format;

    2. the production qualifies as having Significant New Zealand Content;

    3. the production is likely to meet the minimum expenditure threshold;

    4. the level of non-NZ government funding meets the minimum threshold;

    5. the evidence of commercial distribution meets the criteria;

    6. the application meets other relevant criteria; and

    7. for applications for an Additional Grant, the additional criteria in Appendix 4 have been satisfied.

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

    27.3Fee

    A fee, as determined by the NZFC from time to time and published on its website, may be payable for making an application for a Provisional Certificate. If a fee is payable, the NZFC will not begin processing an application for a Provisional Certificate until the NZFC has been paid the full amount of the fee. A fee may also be payable for making an application for an extension of a provisional certificate (see clause 27.4, below). The amount of any extension fee will be published on the NZFC website.

    27.4Validity of 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. In exceptional circumstances, applicants can apply to the NZFC for an extension to their Provisional Certificate.

    In any event, applicants can submit a new application for a Provisional Certificate. A re-application fee may be charged. The amount of any fee will be published on the NZFC website.

    If an applicant holds a Provisional Certificate and a material element of the production changes (e.g. changes to creative personnel, cast, filming locations) the applicant must contact the NZFC to see if those changes might affect the eligibility of the production for a New Zealand Grant. This will be particularly important for matters affecting Significant New Zealand Content.

  • 28. Exchange rate fluctuation and pre-qualification

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

    The applicant must submit an application for a Provisional Certificate under clause 27 and at the same time must:

    1. 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. nominate the relevant non-New Zealand dollar currency or currencies.

    The application for a Provisional Certificate in respect of this paragraph 28 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 can reapply.

    On the date the NZFC receives the application for a Provisional Certificate it will obtain the relevant mid-month exchange rate/s published on the IRD website. 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 19 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 must use the mid-month exchange rates published on the IRD’s website (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 mid-month exchange rate published on the IRD website for the month in which the relevant payment was made will be 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 an application fee if applicable).

    At the time of final application, the IRD mid-month rate for the month in which the relevant payment was made must 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).

  • 29. Final Applications

    An applicant must submit a final application within six months after Completion of the production.

    Applications for a baseline New Zealand Grant only must be made on the then-current New Zealand Grant Final Application Form, provided on the NZFC website from time to time.

    Applications for a New Zealand Grant that includes an Additional Grant must be made on the then-current Additional Grant Final Application Form, provided on the NZFC website from time to time.

    All contracts provided by an applicant as part of a final application must be fully executed by all relevant parties and be in English or with a professional certified English translation provided.

    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:

    29.1Fee

    A fee, as determined by the NZFC from time to time and published on its website, may be payable for making a final application. If a fee is payable, the NZFC will not begin processing a final application until the NZFC has been paid the full amount of the fee.

    29.2Audited 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. qualified under the Companies Act 1993 to audit companies;

    2. not an officer, partner or employee of the applicant, or a related body corporate of the applicant (but can 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. 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.

    29.3Credit and promotional materials

    All applicants must provide in the completed production, an on-screen end credit and an on-screen NZFC logo, each readable in ordinary circumstances.

    Unless otherwise agreed by the NZFC in writing, the credit must be:

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

    Unless otherwise agreed by the NZFC in writing, the logo must be the current version of the NZFC logo.

    In exceptional circumstances, the NZFC can agree to waive the on-screen credit and/or logo 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.

    From time to time the NZFC may request a licence or permission to use certain of the promotional materials. The applicant must consider any such request in good faith, having regard to any contractual restrictions in relation to such material.

    The applicant must provide proof of compliance with the credit and logo requirements of this clause 29.3. This requirement can be met either by the applicant providing a screen grab or copy of the production that includes the credit and logo.

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

    When is a production considered to be completed?

    Yes, this is mandatory. If there are exceptional circumstances which mean you are unable to provide a credit, logo and/or 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 requirement.

    The promotional material schedule can be viewed on the NZFC website: http://www.nzfilm.co.nz/resources/promotional-materials-schedule

    29.4Copy of Production

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

    29.5Statutory 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. Please note that under New Zealand law there are specific legal requirements for certification of statutory declarations.

    29.6English language documents

    For official co-productions, if TPE is used for the purposes of assessing whether the expenditure threshold set out in clause 8.2 is met, the applicant must provide English-language copies of co-production partner financial records and contracts in relation the production, requested by the NZFC and reasonably necessary to assess the TPE, QNZPE and whether the expenditure threshold is met.

    29.7Further information as requested

    The NZFC reserves the right to require any further information the NZFC deems necessary to complete the assessment process. This information must be provided at the applicant’s expense within 14 days of the NZFC’s request, although the applicant can write to the NZFC seeking an extension of time. The period of time between the NZFC’s request for information and the applicant providing a satisfactory response will not be counted towards the NZFC’s processing times notified by the NZFC from time to time.

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

  • 30. Final application for Additional Grant

    In addition to the requirements set out in clause 29, a final application for an Additional Grant must include supporting evidence that demonstrates that the applicant will meet all of the requirements of Appendix 4, including 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.

    An applicant who applies for an Additional Grant must provide all information that is reasonably requested during the application process by the NZFC or NZSPG Panel.

  • 31. Confidentiality

    Certain information supplied by the applicant to the NZFC or independent consultants will be provided to the NZSPG Panel IRD, MBIE, MCH and independent consultants where reasonably necessary during the application and approval process. Once the New Zealand Grant has been approved and paid, the NZFC or MCH can publish or announce the following information:

    • the names of successful applicants;

    • the amount of the QNZPE incurred by each applicant; and

    • the amount of New Zealand Grant paid to each applicant.

    Once the New Zealand Grant has been approved and paid, the amount of the QNZPE and the amount of a New Zealand Grant may be announced or published on the NZFC website and in any other publications selected by the NZFC or by any other part of the New Zealand Government.

    Except where disclosure is permitted by clauses 31 to 33 (inclusive), the NZFC will use reasonable efforts to maintain the confidentiality of the information provided by the applicant. The NZFC, the NZSPG Panel, IRD, MBIE and MCH are government entities, which are subject to various disclosure requirements, for example disclosure of information under the Official Information Act 1982. None of them will be liable for any disclosure it believes (acting reasonably) it is required to make.

    As such, applicants are advised to clearly indicate those parts of its application that the applicant regards as commercially sensitive and confidential. In processing a request under the Official Information Act 1982, the NZFC or relevant New Zealand Government agency will consult the relevant applicant prior to a decision on release of information.

  • 32. Information for research purposes

    Information provided by the applicant may be used by the NZFC and provided to other parts of the New Zealand Government for research purposes; for example, as part of a study on the broader economic, industry development and cultural impacts of a production. Only non-identifying or aggregated information will be made public.

  • 33. Exit survey

    When making a final application, applicants will be required to complete a 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 or aggregated information will be made public.

    The NZFC will not begin processing a final application until the NZFC has received a complete exit survey.

  • 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 screen production desk’s website at www.ird.govt.nz/industry-guidelines/screen-production/.

  • 35. Application forms

    Application forms can be found on the NZFC website at http://www.nzfilm.co.nz.

    Applications, including all required documentation, must be submitted as specified on the NZFC website.

  • 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 10 of the Criteria.

    FAQ: Where can I get application forms?

    Where can I get application forms?

    Application forms are available from the NZFC website.

    There are a number of application forms on the NZFC website, depending on what Criteria apply and the Grant applied for. Please check that you have used the correct form.

    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 agreements that are submitted as attachments must be dated and signed by all parties to the agreement. This includes (but is not limited to) above-the-line agreements, distribution agreements and financing agreements.

    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 with your application, the NZFC will 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
    • If the NZFC or an independent consultant requests further information from an applicant, the time between the request for information and the applicant providing a satisfactory response will not count towards the NZFC’s stated processing time.

    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. A further application fee may be payable.

    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 to the NZFC an invoice and formally verified bank account details. Payment will be made into the nominated bank account within 10 business days of the NZFC receiving the invoice and formally verified bank account details.

    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 6 – Assessment Process

  • 36. Assessment process

    Once the NZFC receives an application, it is checked to ensure that it is complete and includes all relevant documents (as per the checklist at the back of the application form).

    Once the application is complete, the applicant is sent an acknowledgement letter. The date of this letter is the start of the assessment process.

    The complete application may be sent to an independent consultant contracted by the NZFC, or assessed internally at the NZFC. The independent consultant’s role is to assess the application against the requirements of the criteria. All independent consultants are subject to a contractual duty of confidentiality.

    If necessary, the independent consultant will contact the applicant or the applicant’s auditor, to obtain further information about the application, production or applicant. A delay in providing further information on request may impact processing time.

    If the request for information relates to non-arm’s length issues, the independent consultant may seek information on the process and methodologies adopted to show that the amounts charged accord with the arm’s length principle.

    The NZFC will prepare a report, based on the independent consultant’s report, for the NZSPG Panel to consider. It is NZSPG Panel’s role to assess whether the application satisfies the criteria.

  • 37. Processing time

    The NZSPG Panel will process applications within the processing times notified by the NZFC from time to time. The processing time for an application will not begin until the NZFC has sent the applicant an acknowledgement letter, as per clause 36.

    If the NZFC or an independent consultant requests further information from the applicant, the time between the request for information and the applicant providing a satisfactory response will not be counted towards the NZFC’s stated processing time in respect of that application.

  • 38. NZSPG Panel

    The NZSPG is administered by the NZFC on behalf of MCH. Applications for a New Zealand Grant (including any Additional Grant) are assessed by the NZSPG Panel, a panel made up of industry practitioners and representatives from the NZFC and MCH. The NZSPG Panel will determine whether applications satisfy the criteria. A representative from each of IRD and MBIE 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.

  • 39. IRD verification and payment of New Zealand Grant

    Once a complete final application has been received, the NZFC will provide the application to IRD for IRD verification.

    The NZFC will endeavour to process the application within three months.

    Payment of the New Zealand Grant (including the Additional Grant) is dependent on:

    1. IRD verifying the quantum of the potential claim for QNZPE against records held by IRD; and

    2. approval by the NZSPG Panel.

    Provided the requirements of this clause 39 are met, payment of the New Zealand Grant (including any Additional Grant) will be made in New Zealand dollars by the NZFC within ten business days of receipt of an invoice and formal verification of bank account details from the applicant.

Appendix 1 – Definitions and Interpretation

  • Where used in these criteria, the terms below shall have the meaning below:

    $ means New Zealand dollars.

    Additional Grant refers to the grant available to eligible New Zealand Productions (including Official Co-productions) that meet the additional criteria in Appendix 4.

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

    Complete, 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 in any form or format. For different formats, this means:

    1. feature film – when it is completed to Digital Cinema Package (DCP) format or any replacement format ready for distribution;

    2. single episode programme – when the programme is finished to master video tape stage (or digital equivalent) with credits ready for broadcast;

    3. 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. season of a series – when all of the episodes 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.

    Development Expenditure means expenditure incurred prior to official pre-production on development of the production, and includes expenditure on any of the following:

    • location surveys and other activities undertaken to assess locations;
    • storyboarding;
    • scriptwriting / purchase of story rights;
    • research;
    • casting;
    • budgeting; and
    • scheduling.

    Entertainment includes alcohol, wrap parties, and meals outside a 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, vouchers 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.

    IRD means the Inland Revenue Department.

    LBSPG means the Large Budget Screen Production Grant scheme that was introduced by the New Zealand Government in 2003 and that was replaced by the NZSPG in April 2014.

    MBIE means the Ministry of Business, Innovation and Employment.

    MCH means the Ministry for Culture and Heritage.

    New Zealand Citizen or Citizen means a natural person who has acquired New Zealand citizenship under the Citizenship Act 1977.

    New Zealand Financing Percentage means:

    1. in the case of Official Co-productions, the percentage of financing that is nominated as the New Zealand Financing Percentage in the Official Co-production application; or

    2. In the case of a non- Official Co-production, the percentage of financing that is provided by New Zealand Residents.

    New Zealand Government Production Funding means funding that is:

    1. 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. to be cashflowed to the production budget of the production.

    New Zealand Grant means the grant available under the NZSPG to New Zealand Productions (including Official Co-productions) only.

    New Zealand Permanent Resident or Permanent Resident means a person who meets the definition of a permanent resident under the Immigration Act 2009.

    New Zealand Production means a production with significant New Zealand content.

    New Zealand Resident or Resident means:

    1. 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. in the case of a company, a company that the Income Tax Act 2007 treats as a New Zealand resident under section YD 2.

    NZFC means the New Zealand Film Commission.

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

    NZSPG Panel means the New Zealand Screen Production Grant Panel.

    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.

    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. for scripted productions: 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. for unscripted productions and documentaries (whether scripted or unscripted): 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. for animation: the period from the day on which an ongoing schedule of 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 an application for a Provisional Certificate, a production is likely to qualify for a New Zealand Grant.

    Qualifying Person means a person who is a New Zealand Citizen or a New Zealand Permanent Resident at the time the production is made and who is credited in the production.

    QNZPE means Qualifying New Zealand Production Expenditure, as defined in Section 3.

    Remuneration means all contractual entitlements to fees, accommodation, per diems, childcare and other allowances but excluding travel.

    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 Cultural Benefits Test means the test set out in Appendix 4 in relation to the Additional Grant, used to determine whether a production brings significant cultural benefits to New Zealand.

    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 was replaced by the NZSPG in April 2014.

    TPE means Total Production Expenditure, as defined in Appendix 2.

Appendix 2 – Total Production Expenditure (TPE) for Official Co-productions

  • 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. Financing Expenditure

    2. Development Expenditure

    3. Acquisition or licensing of copyright, other than stock or archive footage

    4. General business overheads

    5. Publicity and promotion expenditure

    6. Guaranteed Deferments, Participation Payments, Residuals or advances thereof

    7. 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 6 are also excluded from TPE.

  • Additional FAQs - Official Co-productions

    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 productions?

    Does the same co-production criteria apply to non-official 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 defined in Appendix 2 of the Criteria. It is essentially the total production budget (worldwide) less certain excluded costs.

    TPE 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.

    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.

    When submitting a final application, all contracts must be fully executed by all relevant parties and be in English or with a professional certified English translation provided.

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

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

    If you are applying for provisional certification, you must have submitted your provisional co-production application before your application for provisional certification.

    If you are applying for final certification, you must have submitted your final co-production application before your application for final certification.

    The Grant will not be paid out until the final co-production certificate has been issued and signed by all competent co-production authorities.

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 (including Official Co-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 (including Official Co-productions) may also be entitled to a grant on additional QNZPE above $15 million but no more than $50 million if the applicant meets the requirements for an Additional Grant under Appendix 4.

    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 must be read in conjunction with the full criteria and other documentation for the NZSPG.

    The NZSPG is administered by the NZFC on behalf of MCH.

    Significant New Zealand Content

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

    (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.

    ‘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. The subject of the film.
    2. The locations at which the film was or is to be made.
    3. The nationalities and places of residence of—
      1. 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. 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. The persons who have or are to have the copyright in the film.
    4. 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. The ownership and whereabouts of the equipment and technical facilities that were or are to be used to make the film.
    6. Any other matters that in the opinion of the Commission are relevant to the purposes of this Act.

    Purpose of the guidelines

    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 screen productions

    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 will be assessed on the following basis:

    • a production that receives at least 20 points out of 32 will generally be considered to have significant New Zealand content for the purposes of the NZSPG, subject to there being no relevant factors that mitigate against eligibility.

    • All productions will generally be expected to receive a minimum of 3 points related to New Zealand Subject Matter (Section A).

    • All productions will 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 retains the ability to reject applications where it is suspected that feature films are applying as other formats.

  • Official Co-productions

    As stated in the 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).

    Official Co-productions that intend to apply for an Additional Grant should note the following:

    Official Co-productions will not automatically be considered to provide significant cultural benefits to New Zealand for the purpose of eligibility for the Additional Grant. An Official Co-production that wishes to apply for an Additional Grant must meet all of the requirements of Appendix 4, including passing the Significant Cultural Benefits Test.

  • Significant New Zealand Content 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, reality, lifestyle etc.: presenter, narrator, subject
    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 New Zealand Permanent Resident at the time the production is being made and be credited in the production (a Qualifying Person).  
    C1 – Director (2 points if the director is a Qualifying Person 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 a Qualifying Person or if there are more than three, one of the three lead producers is a Qualifying Person) 2 (0 or 2)
    C3 – Scriptwriter (2 points if the writer is a Qualifying Person 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 a Qualifying Person 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 a Qualifying Person, 2 points if 2 of the lead actors are Qualifying Persons)
    Documentaries, reality, lifestyle etc.: actors only (if significant dramatic recreations)
    Animation: voice actors
    2 (0 – 2)
    C6 – Majority of Cast (50% plus) (1 point if 50% of the cast are Qualifying Persons)
    Documentaries, reality, lifestyle etc.: presenters, narrators actors (if there are significant dramatic recreations)
    1
    C7 – Key Production Roles (1 point if 2 of the key production roles are Qualifying Persons, 2 points if 3 of the key production roles are Qualifying Persons)
    Drama: lead cinematographer, lead production designer or art director, lead editor, lead digital/visual/special effects supervisor
    Documentaries, reality, lifestyle etc.: 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.

  • Additional Grant

    Applicants who wish to apply for an Additional Grant should be aware that a higher threshold in respect of New Zealand cultural elements will apply. See Appendix 4 for more details.

  • Double counting

    The following rule about double counting applies to sections A2, C5 and C6.

    Within each of sections A2, C5 and C6, individuals can have points attributable to them in respect of one role only. If an individual can qualify for more than one role within a section, the applicant must choose what role it wants to claim points for in respect of that individual.

    For example, in section A2 an applicant cannot claim 2 points in respect of an individual that is a narrator and a presenter. Instead, the applicant must choose whether to claim points for the individual as a narrator or as a presenter.

    For the avoidance of doubt, this double counting rule does not limit the ability of an applicant to claim points where an individual qualifies for multiple roles across different sections. For example, an applicant can claim points where an individual is both a lead character (Section A2) and a lead actor (Section A5).

  • 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 New Zealand Resident for the majority of his or her time on screen in order to be considered a New Zealand character.

    Whether a character is a lead character will be determined by taking account of centrality and prominence of the character in the story. Applicants will be asked to identify the lead characters and make the case for a character’s centrality and prominence in the story.

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

    An individual can have points attributed to them for one role only in this section A2. For example, where an individual is a presenter and is also a subject, the applicant can only claim points for one of the individual’s roles.

    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 New Zealand Permanent Resident; or

    • is based on a book, story, article, play etc. written by a New Zealand Citizen or New Zealand Permanent Resident; or

    • is based on an original concept by a New Zealand Citizen or New Zealand 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, Permanent Residents 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, Permanent Resident or Resident), then up to 3 points can be awarded depending on the level of involvement of New Zealand Citizens Permanent Residents or Residents. If the original concept for a screen production is not by a New Zealand Citizen or Permanent Resident 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, Permanent Residents or Residents.

    Applicants claiming points in this section will be required 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, Permanent Residents 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, Permanent Residents 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, Permanent Residents 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 Permanent Residents 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.

    A5 – Reaching New Zealanders - Audience Engagement Plan (Additional Grant Only)

    The intention of this section is to reward productions that reach and engage New Zealanders. While it is acknowledged that every production is different and will have a different appeal, productions applying for the additional grant are expected to demonstrate:

    1. Which target audience the production will appeal to;

    2. An indication of the potential audience size; and

    3. A marketing and release strategy outlining how the audience will be reached.

    Up to 3 points will be awarded depending on the breadth and depth of the engagement with New Zealanders on the following basis:

    • 1 point can be awarded to a production that demonstrates the reach and engagement with a primary audience;

    • 2 points can be awarded to a production that demonstrates the reach and engagement with a primary and secondary audience;

    • 3 points can be awarded to a production that demonstrates a four quadrant reach.

  • 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 Resident 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 lead 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 limited to ISDN connections provided the cost is charged to a New Zealand Resident

    • 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 international 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

    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 can 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 can 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 can 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, reality and factual series only: this will include 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.

    A maximum of 1 point can be claimed per individual.

    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, reality and factual series only, this will include:

    • the narrator;

    • the presenter; 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.

    An individual can qualify in only one capacity or role when counting cast for the purposes of this section C6.

    C7 – Key Production Roles

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

    • 1 point can be awarded if two of the key production roles are Qualifying Persons.

    • 2 points can be awarded if three of the key production roles are Qualifying Persons.

    Key production roles 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 roles 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 roles 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 sole 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.

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

Appendix 4 – Additional Grant and Significant Cultural Benefits 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 relevant eligibility criteria are able to access a grant equivalent to 40% of QNZPE. The New Zealand Grant is capped at $6 million per production unless the production qualifies for an Additional Grant under this Appendix 4. If the production qualifies, the Additional Grant is 40% of QNZPE from $15 million to $50 million. The Additional Grant is capped at $14 million per production, making the total maximum New Zealand Grant per production $20 million per production.

  • Application for New Zealand Grant and Additional Grant

    Applicants may apply for an Additional Grant if:

    1. the applicant is eligible for a New Zealand Grant in respect of the production; and

    2. the applicant meets the eligibility requirements in this Appendix 4, including the requirement that the production demonstrates significant cultural benefits to New Zealand, by meeting the requirements of the Significant Cultural Benefits Test.

    Applicants (including Official Co-productions) who wish to apply for an Additional Grant must follow the application process set out in Section 5 of the Criteria. If seeking an Additional Grant, applicants must apply for a Provisional Certificate in respect of the Additional Grant. An applicant who has not received a Provisional Certificate in respect of an Additional Grant will not be eligible to make a final application for an Additional Grant.

  • General

    The NZSPG Panel has sole discretion to determine whether a production and applicant satisfy the eligibility requirements of the Additional Grant. The Additional Grant has a high threshold (having regard to the purpose and intent of the criteria, set out in clause 3).

    Applicants are strongly advised to engage with the NZFC during the financing of the production if intending to apply for an Additional Grant.

  • Summary

    In addition to meeting the requirements of the criteria, to be eligible for the Additional Grant an applicant (including an Official Co-production) must:

    1. satisfy the QNZPE Threshold;

    2. satisfy producer experience requirements;

    3. satisfy market attachment requirements;

    4. meet the requirements of the Significant Cultural Benefits Test; and

    5. provide cultural benefit to New Zealand that is commensurate with the value of the Additional Grant applied for.

  • Eligibility

    1. QNZPE 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 baseline Grant is capped at $6 million per production. However, if the production has QNZPE of more than $15 million and meets the requirements of Appendix 4 of the Criteria, an applicant can apply for an Additional Grant. The Additional Grant is paid on QNZPE between $15 million and $50 million. Official Co-productions also require QNZPE of more than $15 million to apply for an Additional Grant. TPE cannot be used for the Additional Grant expenditure threshold.

    To qualify for an Additional Grant the Producer must have the minimum level of experience specified in the Criteria and the production must have market attachments that comprise at least 10% of the production’s budget. In addition, the production (including an official co-production) must meet or exceed the minimum points in the Significant Cultural Benefits Test and must provide cultural benefits to New Zealand that are commensurate with the value of the Additional Grant applied for. 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. The applicant must be entitled to retain the remaining 50% Equity Share in the amount of the Grant that is over-and-above the QNZPE of $15 million (see Producers Income). Evidence of legally binding agreements will be required at Final Certification to confirm compliance with the specific eligibility criteria. Full details are set-out under Appendix 4 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.

    2. Producer experience

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

    The applicant must demonstrate that the producer has the experience described below. If applying in respect of:

    (a) A feature film: the producer must have produced at least one feature film that has been released theatrically in New Zealand or overseas.

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

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

    3. Market 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) for the screening or broadcast of the production to an audience where there is no entitlement to share in the net receipts from the production in respect of that sales advance, distribution advance or licence fee. Equity and loans cannot qualify as market attachments. Any market attachments must be from parties unrelated to the applicant and from bona fide screen production sales agents, distributors or broadcasters.

    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.

    4. Significant Cultural Benefits Test

    The production must meet or exceed the minimum points in the Significant Cultural Benefits Test (below).

    Except for references to minimum or mandatory points, the explanatory notes to the Significant New Zealand Content Points Test, in Appendix 3, also apply to the Significant Cultural Benefits Points Test.

    5. Cultural benefit to New Zealand is commensurate with value of Additional Grant

    In addition to meeting the requirements set out in paragraphs 1-4 above, the NZSPG Panel must be satisfied that the production and/or applicant will provide cultural benefits to New Zealand commensurate with the value of the Additional Grant applied for.

    Significant Cultural Benefits Test

    Significant Cultural Benefits Points Test 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, reality, lifestyle etc.: presenter, narrator, subject
    3 (0 - 3)
    A3 – Creative Material 3 (0 - 3)
    A4 – Contribution to New Zealand Culture/History 2 (0 - 2)
    A5 - Reaching New Zealanders - Audience Engagement Plan 3 (0-3)
    Total – Section A (minimum: 5) 14
    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 (minimum: 3) 6
    C – New Zealand Personnel  
    To qualify, individuals must be a New Zealand Citizen or New Zealand Permanent Resident at the time the production is being made and be credited in the production (a Qualifying Person).  
    C1 – Director (2 points if the director is a Qualifying Person 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 a Qualifying Person or if there are more than three, one of the three lead producers is a Qualifying Person) 2 (0 or 2)
    C3 – Scriptwriter (2 points if the writer is a Qualifying Person 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 a Qualifying Person 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 a Qualifying Person, 2 points if 2 of the lead actors are Qualifying Persons)
    Documentaries, reality, lifestyle etc.: actors only (if significant dramatic recreations)
    Animation: voice actors
    2 (0 – 2)
    C6 – Majority of Cast (50% plus) (1 point if 50% of the cast are Qualifying Persons)
    Documentaries, reality, lifestyle etc.: presenters, actors, narrators (if significant dramatic recreations)

    1

    C7 – Key Production Roles (1 point if 2 of the key production roles are Qualifying Persons, 2 points if 3 of the key production roles are Qualifying Persons)
    Drama: lead cinematographer, lead production designer or art director, lead editor, lead digital/visual/special effects supervisor
    Documentaries, reality, lifestyle etc.: 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 (minimum 1 point) 2
    Total – minimum 27 points __ (out of 35)

    Share of net receipts (including profit)

    NZFC 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 14 of the Criteria (Producer’s income)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).

    Interpretation

    For the purposes of this Appendix 4, 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.