NZSPG Criteria International 1 August 2015

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1 August 2015

This document sets out the eligibility criteria for the New Zealand Screen Production Grant for International 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 International Productions dated 1 August 2015 before reading these FAQs. If there are any conflicts between these FAQs and the Criteria, the Criteria will always prevail. These FAQs are intended to help you interpret the Criteria only and are non-binding. Accordingly the New Zealand Film Commission (NZFC) does not accept any responsibility for errors or misstatements in these FAQs.

Section 1 - Introduction

  • 1. Introduction

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

    These criteria are the NZSPG Criteria for International Productions. International Productions are generally those productions that do not have Significant New Zealand Content and/or that are of a larger scale than productions that apply under the NZSPG Criteria for New Zealand Productions.

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

    Productions that have Significant New Zealand Content should refer to the NZSPG Criteria for New Zealand Productions to see whether they are eligible for a New Zealand Grant under those criteria.

  • 2. Key Definitions

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

    $ means New Zealand dollars.

    5% Uplift means an increase to the International Grant of 5% over the baseline grant of 20% of QNZPE. This is only available to eligible productions that pass the Significant Economic Benefits Test.

    IRD means the New Zealand Department of Inland Revenue.

    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.

    New Zealand Grant means the grant available to New Zealand Productions under the NZSPG Criteria for New Zealand Productions.

    New Zealand Productions means productions with Significant New Zealand Content.

    NZFC means the New Zealand Film Commission.

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

    PDV Activity means, in general, the post, digital and visual effects production activities including but not limited to those listed in Annexure 3 (as may be updated from time to time) to the extent they occur in New Zealand.

    PDV Grant means the grant available under the NZSPG to eligible PDV Productions.

    PDV Productions means productions that meet the criteria in clause 9 of Section 2A.

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

    Significant Economic Benefits Test means the test used to determine whether a production brings significant economic benefits to New Zealand. This test is included in the Significant Economic Benefits Guidelines in Annexure 2.

    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 those criteria.

  • 3. Purpose

    The purpose of the NZSPG for International Productions is to provide economic benefits to New Zealand by incentivising screen production (and the resulting production expenditure in New Zealand) that would not have otherwise been made here.

    The purpose of the PDV Grant is to specifically foster capacity and new business development for large budget PDV Productions in New Zealand.

    In establishing the NZSPG for International Productions, the New Zealand Government recognises that large budget screen productions and PDV Activity contribute to New Zealand's economic development by providing valuable economic, employment and skill development opportunities for the New Zealand screen production industry. The International Grant will ensure that New Zealand remains competitive in attracting large budget screen productions and PDV Activity from offshore.

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

  • 4. Amount of International Grant

    The International Grant is 20% of QNZPE.

    Productions that qualify for the 5% Uplift will receive a total International Grant of 25% of QNZPE.

  • 5. Effective Date, Transitional Provisions and Historical Costs

    Effective Date
    These criteria are effective from 1 August 2015.

    Transitional Provisions
    International Productions that have started Principal Photography before 1 August 2015 or PDV Productions that have started PDV Activity in New Zealand before 1 August 2015 will be assessed under the NZSPG criteria dated 1 April 2014.

    International Productions that start Principal Photography on or after 1 August 2015 or PDV Productions that have started PDV Activity in New Zealand on or after 1 August 2015 will be assessed under these criteria.

    The International Grant on any QNZPE relating to goods or services provided on a production before 1 April 2014 will be paid at the previous rate of 15%.

    Historical Costs
    Any expenditure on a screen production incurred before 1 April 2003 is excluded. Only QNZPE incurred on or after 16 July 2007 on PDV Production undertaken after 16 July 2007 shall be eligible for the PDV Grant.

    In general, costs paid more than ten years prior to the start of Principal Photography or PDV Activity cannot be claimed as QNZPE. If an applicant wishes to claim costs paid more than ten years prior to the start of Principal Photography or PDV Activity, they must apply for provisional certification and the NZSPG Panel will determine, at its sole discretion, taking into account the current status of the production, whether there are exceptional circumstances to allow these costs to be claimed as QNZPE.

  • 6. Eligibility for International Grant

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

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

    To be eligible for the 5% Uplift, productions and applicants must also pass the Significant Economic Benefits Test.

Visual Overview of the International Grant

  • Visual Overview of the International Grant

Section 2A - Specific Eligibility Criteria

  • 7. Feature Films

    7.1Format

    1. (a)A feature film is a production that is not excluded under clause 7.1(b) and is:
      1. (i)commonly screened as the main attraction in commercial cinemas;
      2. (ii) not less than 60 minutes, or in the case of a large format (IMAX) film not less than 40 minutes; and
        is shot and processed to commercial release standards primarily for exhibition to the public in cinemas. Feature length content that is not intended primarily for exhibition to the public in cinemas, e.g. telefeatures or home entertainment releases, may be eligible if they meet the requirements of clause 8.1.
    2. (b) A production that fits into any of the following categories (or to a substantial extent fits into the following categories) is specifically excluded from eligibility:
      1. (i)an advertising programme or commercial;
      2. (ii)a discussion programme, current affairs, news, a panel programme, or a programme of a like nature;
      3. (iii)pornography;
      4. (iv)a training programme;
      5. (v)an interactive digital game (other than transmedia content as per clause 16.2(b)(iv)); or
      6. (vi)a production of a public event, including a sports event.

    7.2Expenditure threshold

    A feature film must have QNZPE of $15 million or more.

    7.3Simultaneous or Concurrent Shooting of Feature Films

    Applicants may seek approval to treat more than one feature film as one production for the purposes of the International Grant in the following circumstances:

    1. (a)Where all aspects of the production (pre-shoot-post) are being treated by the producers as a single production and there is no separation of resources between feature films;
    2. (b)Where all feature films are being budgeted as a single production and reported on that basis;
    3. (c)Where all feature films share the same or substantially similar setting and characters and an overarching narrative (e.g. parts of a trilogy, prequels, sequels).

    Where the above applies to more than one film, the NZFC will treat all feature films as one production for administrative purposes only. Each feature film within the package will need to meet the relevant eligibility threshold for a feature film or the bundling criteria. The average QNZPE per film will be used to determine eligibility. This clause will not entitle any production costs to be QNZPE if they would not otherwise have been QNZPE if each feature film had been treated as a separate production. However, for the purposes of clause 16.2(b), the date of Completion of the production will be the date the last feature film approved for such treatment is completed. Requests should be made in writing to the NZFC stating how the films meet the criteria in this clause and these will be considered on a case-by-case basis.

  • 8. Television and Other Non-feature Films

    8.1Format

    1. (a)A television or other non-feature film is a production that is not excluded under clause 8.1(b) and is either:
      1. (i)a single episode programme (including a telefeature or feature length content that is not primarily intended for exhibition to the public in cinemas) whether scripted or unscripted including but not limited to drama, documentary, factual, reality, children's and animation;
      2. (ii) a series or season of a series whether scripted or unscripted including but not limited to drama, documentary, factual, reality, children's and animation being a programme with a common theme or themes consisting of at least two episodes that are intended for release together in a national market or markets and with individual episodes that have completed Principal Photography within 24 months from the start of Principal Photography, and
      3. 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.
      4. Where the Principal Photography of episodes in a series or season of a series may exceed 24 months due to the specific requirements of the production (e.g. documentaries covering a long time period or complex animation projects), applicants may seek approval from the NZFC to extend the 24-month period. Requests should be made in writing to the NZFC stating the reasons why the production requires an extension and these will be considered on a case-by-case basis.
    2. (b) A production that fits into any of the following categories (or to a substantial extent fits into the following categories) is specifically excluded from eligibility:
      1. (i)an advertising programme or commercial;
      2. (ii)a discussion programme, current affairs, news, a panel programme, or a programme of a like nature;
      3. (iii)pornography;
      4. (iv)a training programme;
      5. (v)an interactive digital game (other than transmedia content as per clause 16.2(b)(iv));
      6. (vi)a production of a public event, including a sports event; or
      7. (vii)a production principally made for the New Zealand market.

    8.2Expenditure threshold

    A television or other non-feature film production must have total QNZPE of $4 million or more. There is no per episode or per hour QNZPE requirement.

  • 9. PDV Production

    9.1Format

    A PDV Production must be one of the formats in clauses 7.1 or 8.1.

    9.2Expenditure threshold

    A PDV Production must have QNZPE of $500,000 or more. QNZPE in relation to PDV Productions only, means QNZPE that is spent directly on or is necessarily related to PDV Activity. QNZPE necessarily related to PDV Activity includes but is not limited to:

    1. (a)the fees and expenses of personnel working on PDV Activity;
    2. (b)the hire of studio and office space for PDV Activity;
    3. (c)the purchase or hire of equipment used for PDV Activity; and
    4. (d)the depreciation of assets used for PDV Activity.
  • 10. Bundling

    10.1Format

    Each production within a bundle must be one of the formats in clauses 7.1 or 8.1.

    10.2Expenditure threshold

    A bundle consists of two or more productions where:

    1. (a)each production has QNZPE of $3 million or more;
    2. (b)all productions have completed Principal Photography (or PDV Activity for a PDV Production) within 36 months following the date that the first of those productions commenced Principal Photography or PDV Activity (as the case may be), and

    the total bundle has QNZPE of $30 million or more.

    10.3Applicant for a bundle

    Each production within a bundle must either:

    1. (a)have an applicant that is the same entity or a Related Entity to other applicants in the bundle; or
    2. (b)have the same Creative Producer who is a New Zealand citizen or permanent resident.

    FAQ: How does bundling work?

    How does bundling work?

    If you bundle several productions together to achieve a total QNZPE spend of $30 million or more then you will qualify for a Grant provided each production within the bundle has QNZPE of at least $3 million and principal photography or PDV production (as the case may be) is completed within 36 months from the date the first production started principal photography.

    FAQ: Who can apply for a bundle?

    Who can apply for a bundle?

    The applicant for each production within a bundle must be the same entity or a ‘Related Entity’ OR each production must have the same Creative Producer who is a New Zealand citizen or permanent resident. Refer to Appendix 1 of the Criteria for further definitions.

Section 2B - General Eligibility Criteria

  • 11. Special Purpose Vehicle

    11.1Applicant 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 Inland Revenue accepting that the relevant production is eligible to be registered as a separate registered person under section 56(2) of the Goods and Services Tax Act 1985.

    11.2Exceptions

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

    1. (a)Series: the production is a series or a season of a series. In this case a new SPV is not required for each series or season of the production and the applicant's existing GST and payroll registration numbers and bank account may be re-used for the new series or season, provided that there is no overlap in QNZPE to be claimed on each series or season. It is expected that all GST and payroll returns from the start of the new series or season will predominantly include expenditure relating to that series or season. Minor expenditure relating to other series or seasons may be included in those returns but this expenditure must be clearly identified and excluded from QNZPE. If there is overlap in QNZPE to be claimed on each series or season then a new SPV is not required for each series or season and the applicant's existing GST and payroll registration numbers and bank account may be re-used for each production provided that separate tax locations* and a separate back account must be used for each series or season.
    2. (b)Repurposing (non-concurrent use):: the applicant has incurred all QNZPE to be claimed on a previous production and/or has applied for an International Grant (or a SPIF or LBSPG grant) in respect of that previous production. In this case, the applicant's existing GST and payroll registration numbers and bank account may be re-used for the new production. It is expected that all GST and payroll returns from the start of the new production will predominantly include expenditure relating to that production. Minor expenditure relating to the previous production may be included in those returns but this expenditure must be clearly identified and excluded from QNZPE.
    3. (c)Bundling: the production is part of a bundle. In this case, a new SPV is not required for each production in the bundle and the applicant's existing GST and payroll registration numbers and bank account may be re-used for each production provided that separate tax locations* and a separate bank account must be used for each production.
    4. (d) PDV Grant Exception 1 (will usually apply when the Producer or Production Administrator is applying for the PDV Grant): for PDV Grant applications, the NZFC has waived the requirement for a SPV on the basis that the NZFC has determined that the application is likely to have all of the following characteristics:
      1. (i)a small number of PDV suppliers who are not associated with the applicant;
      2. (ii)a small number of large-value transactions;
      3. (iii)no live action shoot elements (studio or location);
      4. (iv)no direct labour costs incurred by the applicant; and
      5. (v)the applicant has obtained a separate tax location* for the relevant screen production.

      *An applicant must contact the IRD for information on the steps required to obtain a separate tax location number for an individual production. This number is a separate identifier within the applicant's principal GST and payroll registration number and enables the applicant to submit separate GST and payroll returns under that number without having to set up a separate entity.

      Notes on clause 11.2(d):

      • Tax location numbers should not be re-used.
      • If this exception applies, the production does not need to have a separate bank account.
      • If the applicant engages additional PDV suppliers after the NZFC has waived the requirement for a SPV under this clause, the NZFC waiver will continue to apply.
    5. (e)PDV Grant Exception 2 (will usually apply when the PDV supplier is applying for the PDV Grant): for PDV Grant applications, the NZFC has waived the requirement for a SPV on the basis that the NZFC has determined that the application is likely to have all of the following characteristics:
      1. (i)a total QNZPE of less than $10 million for a single production;
      2. (ii)the applicant has been engaged to supply all services on the production in New Zealand (any services to be provided or sub-contracted by the applicant outside New Zealand must be contracted separately);
      3. (iii)the applicant is not associated with the entity to whom the services are being provided in any way; and
      4. (iv)there is an arm's-length contractual arrangement between the applicant and the entity to which the services are being provided that clearly specifies that the applicant has the right to apply for and retain 100% of the PDV Grant for the production.
    6. Where the exception in this clause 11.2(e) applies, the QNZPE for the production shall be deemed to be equivalent to the arm's-length amount actually paid to the applicant prior to the submission of the final PDV Grant application for the services provided on the production in New Zealand (the purchase price) divided by 80% (or, where the production qualifies for the 5% Uplift, 75%). Where any amount is due but not paid for legitimate commercial reasons, then these will be considered on a case-by-case basis. The PDV Grant will be paid on the QNZPE calculated by this method, however, the NZFC reserves the right to review the expenditure incurred by the applicant to ensure that the purchase price has been paid solely in relation to QNZPE incurred by the applicant on the production. If the purchase price is not in NZD and is near the PDV expenditure threshold of $500,000 the applicant should use the provisional application process to pre-qualify an exchange rate.

      The application process for a final application under clause 11.2(e) is set out in clause 28 of these criteria.

      FAQ: What is the difference between PDV Exception 1 and PDV Exception 2?

      What is the difference between PDV Exception 1 and PDV Exception 2?

      PDV Exception 1 applies where the applicant is the producer who uses one or only a small number of PDV suppliers in New Zealand to undertake PDV work on its various productions. For example, the applicant (a New Zealand company) is owned by a US-based studio which engages one of New Zealand’s digital effects companies to carry out PDV work on its productions. In this example, the studio does not need to set up a new SPV for each separate production, provided it obtains a waiver under this clause.

      PDV Exception 2 applies to smaller PDV production where the NZ-based supplier of the PDV work has decided to apply for the International Grant. This might be because its offshore producer-client does not want to establish an SPV in New Zealand. It is expected that the price agreed between the New Zealand supplier and the offshore producer-client will have been discounted to allow for the fact that the New Zealand supplier would be entitled to receive the Grant. Hence the QNZPE is deemed to be higher than the actual price agreed and paid for the PDV work. For example, a United Kingdom production company engages one of New Zealand’s physical effects companies to create some specialised props. The price is $5 million. The deemed QNZPE will be $6.25 million and the Grant will be paid to the New Zealand physical effect company on this amount.

    Applicants seeking a waiver of the requirement for a SPV under clauses 11.2(d) and (e) may apply to the NZFC at any time, however, the NZFC strongly recommends that such application be made prior to the start of PDV Activity on the production in New Zealand (so that applicants have sufficient comfort that they will qualify for an International Grant). Applications for a waiver must include such information as may be reasonably required by the NZFC to make a determination under the relevant exception.

  • 12. Residency Status

    12.1Residency of applicant

    An applicant must be either:

    1. (a) a New Zealand resident company, which in this context, means a company that:
      1. (i)is incorporated in New Zealand, or
      2. (ii)carries on business in New Zealand and has either its central management or control in New Zealand, or its voting power controlled by shareholders who are residents of New Zealand; or
    2. (b)a New Zealand resident partnership (a partnership is a New Zealand resident if a majority of the partners in the partnership are New Zealand Tax Residents); or
    3. (c)a foreign corporation operating with a fixed establishment in New Zealand for the purposes of lodging an income tax return (both when it lodges the International Grant application and when the International Grant is paid). Advice can be obtained from the IRD on whether a company is a fixed establishment in New Zealand for the purposes of lodging an income tax return.
  • 13. Responsible Entity

    An applicant must be the entity responsible for all activities involved in making the production in New Zealand or, for the PDV Grant, all PDV Activity on the production in New Zealand.

    Only one entity per production can be eligible for the International Grant.

  • 14. Other Grants and New Zealand Incentives

    A production cannot receive an International Grant and a New Zealand Grant.

    A production may not receive more than one International Grant unless the first International Grant was for the pilot of a series in which case the subsequent series may also receive an International Grant (provided that the pilot and the subsequent series each satisfy the eligibility criteria).

    A production seeking an International Grant is not eligible for any other New Zealand government finance or tax incentives in relation to the production (including year 1 deductions under section DS 2 of the Income Tax Act 2007 or funding through government screen agencies such as the NZFC, NZ On Air, Te Māngai Pāho). Productions will, however, be eligible for development funding or non-production funding provided by the New Zealand Government or its non-screen agencies.

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

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

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

    A production may not receive a Grant and any other New Zealand Government production funding, however, it may still receive New Zealand Government development funding or other non-production funding and a Grant. Refer to Clause 14 of the Criteria.

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 to track expenditure that relates to QNZPE and non-QNZPE as early as possible. Where necessary, invoices from any supplier should be broken down to show New Zealand and non-New Zealand activity with computerised accounts formatted to show this split. This will also facilitate the independent audit of the expenditure statements. You should familiarise yourself with the requirements of the final application form as early as possible.

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

    Do I have to use a particular accounting system?

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

  • 16. QNZPE

    16.1General QNZPE definition

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

    1. (a)goods and services provided in New Zealand; or
    2. (b)the use of land located in New Zealand; or
    3. (c)the use of a good that is located in New Zealand at the time that the good is used in the making of the production; or
    4. (d)the specific inclusions set out in clause 16.2,

    but not including the expenditure set out in clause 16.3.

    16.2Specific inclusions

    1. (a)New Zealand Copyright Acquisition
    2.  

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

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

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

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

      Yes, if the original owner of the copyright is a person or company who is, or was, resident in New Zealand for tax purposes*. It is common for an offshore record company to own the copyright in a sound recording, however, if the performer or composer is a New Zealand tax resident then they will be deemed to be the original owner of copyright. Therefore, licence fees payable to offshore record companies can be treated as QNZPE if the original owner of the copyright meets the requirements of Clause 16.2(a) of the Criteria.

      *For further information on New Zealand tax residency, please refer to the IRD’s website: www.ird.govt.nz/international/residency/

      FAQ: Is the cost of a software licence QNZPE?

      Is the cost of a software licence QNZPE?

      This is treated in the same way as the acquisition of other intellectual property (e.g. music licences). Therefore, if the underlying software was created in New Zealand the costs can be claimed. Otherwise, it won’t be QNZPE i.e. Sync on Set.

    4. (b)Additional Audiovisual Content
       Costs incurred in New Zealand on audiovisual content that is intended to be released with the production in some form are QNZPE where they are incurred by the applicant before Completion of the production. Examples of additional audiovisual content for release with the production are:
      1. (i)director or cast commentary tracks;
      2. (ii)‘making of' documentaries;
      3. (iii)material for extended versions;
      4. (iv)any transmedia content released on a second screen where that content is developed and produced in conjunction with the production to be viewed contemporaneously with the production and shares a unified narrative with the production.
    5. FAQ: Do costs relating to publicity and marketing materials qualify as QNZPE?

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

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

    6. (c)Travel to New Zealand
    7.  The cost of each incoming journey to New Zealand undertaken for the purposes of the production is QNZPE. The cost of an incoming journey is equivalent to 100% of a one-way fare or 50% of a return fare on a commercial airline.
    8. FAQ: If I use non-New Zealand cast and crew on the production, do their costs qualify as QNZPE?

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

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

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

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

      FAQ: If New Zealanders travel to another country for part of the production, can I claim their fee and costs relating to those services as QNZPE?

      If New Zealanders travel to another country for part of the production, can I claim their fee and costs relating to those services as QNZPE?

      No, only fees and costs relating to services performed in New Zealand on the production are QNZPE.

      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.

    9. (d)Production Insurance
    10.  The cost of production insurance, excluding errors and omissions insurance, is QNZPE if paid to a New Zealand entity.
    11. 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.

    12. (e)Completion Bonds
    13. 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).
    14. (f)Freight
    15.  The cost of international freight (including excess baggage) is QNZPE if paid to a New Zealand entity.

    16.3Non-QNZPE

    1. (a)Costs relating to short-term visits for non-cast personnel
    2.  The fees and per diems relating to the services of non-cast personnel who travel to New Zealand and work on the production for thirteen days or less (in total). However, costs relating to travel to New Zealand in accordance with clause 16.2(c) are QNZPE.
    3. FAQ: How is the 14-day rule applied to crew who work on the production?

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

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

    4. (b)Acquisition or licensing of copyright

    5.  The cost of acquiring or licensing copyright in a pre-existing work where the original owner of copyright in such work is not, or was not, a New Zealand Tax Resident and the cost of commissioning and purchasing copyight (or an interest in copyright) in a work for use in the production where the work is not, or was not, created in New Zealand.
    6. (c)Publicity and promotional costs incurred after Completion
    7.  Publicity and promotional costs incurred after Completion of the production.
    8. (d)Additional audiovisual content incurred after Completion
    9.  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.
    10. (e)Advances
    11.  Recoverable advance payments in respect of Guaranteed Deferments, Participation Payments or Residuals.
    12. (f)Financing Expenditure
    13.  All Financing Expenditure.
    14. FAQ: Do any financing costs qualify as QNZPE?

      Do any financing costs qualify as QNZPE?

      No, all financing costs are non-QNZPE for international productions.

    15. (g)Business overheads cap
    16.  Business overheads above 5% of the QNZPE or $500,000 whichever is the lesser.
    17. FAQ: What business overheads are subject to the cap?

      What business overheads are subject to the cap?

      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).

      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.

      An applicant claiming an overhead for a New Zealand registered company that does not have a functioning office in New Zealand would not qualify.

      FAQ: How do I calculate the cap?

      How do I calculate the cap?

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

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

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

    18. (h)Guaranteed Deferments, Participation Payments, Residuals
    19.  Guaranteed Deferments, Participation Payments, and Residuals.
    20. 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.

      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.

    21. (i)Acquisition of Depreciating Asset
    22.  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.
    23. FAQ: Should I treat wardrobe and props as expenses or assets?

      Should I treat wardrobe and props as expenses or assets?

      It depends on what the value of each item is at the end of the production. If items have no value at the end of production and are thrown away or destroyed, then the full purchase price can be claimed as QNZPE. If there is still some value at the end of production and the item is sold, then the difference in price should be used for your QNZPE calculation. Usual accounting practices should be applied. 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: www.ird.govt.nz/business-income-tax/depreciation/bit-accounting-depreciation.html

      International wardrobe is claimable when it is used in New Zealand on the production and there is a clear paper trail demonstrating where the item was bought and the original price. Costs may need to be apportioned if the wardrobe items are then shipped off shore and used on the shoot in another country.

    24. (j)Legal
    25.  Legal fees that are NOT related to:
      1. (i)the drafting and/or negotiation of production and financing documents; or
      2. (ii)legal advice on issues arising in the normal course of the making of a production.
      3. Applicants should ensure that their legal advisors provide a breakdown of their fees.
    26. (k)Others
    27.  Cast and Crew Perks, gifts, fines, Entertainment and Gratuities and any historical costs listed in clause 5.
    28. FAQ: What are cast and crew ‘perks’?

      What are cast and crew ‘perks’?

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

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

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

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

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

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

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

    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 as QNZPE 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 on the provision of all services, or the actual or carefully estimated use of a good or person by the production in New Zealand 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: Can development and pre-production expenditure be claimed as QNZPE?

    Can development and pre-production expenditure be claimed as QNZPE?

    Yes, but only New Zealand development and pre-production expenditure will qualify as QNZPE.

    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 of its costs are automatically QNZPE. If a supplier performs any element of its services outside New Zealand which would normally be excluded from QNZPE if performed directly by the applicant, these services need to be separately identified in any invoices and excluded from QNZPE.

    This requirement is particularly relevant to PDV work where the majority of the expenditure is often payable to one supplier. The applicant for a PDV Grant must require suppliers of PDV Production services to provide invoices which are broken down to show the cost of New Zealand-based services and non-New Zealand-based services, so only services in New Zealand are QNZPE.

    FAQ: Can fees for assistants to executive producers be claimed as QNZPE?

    Can fees for assistants to executive producers be claimed as QNZPE?

    If the assistant is providing their services directly to the executive producer rather than to the production, and the fees are not part of the production budget, then the fees and all expenses are not claimable as QNZPE.

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

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

    Yes, the SPADA Levy qualifies as QNZPE.

Section 4 - Treatment Of Expenditure

  • 17. Income Tax

    The International 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 International Grant.

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

    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.

    FAQ: Can VAT or other tax be included in QNZPE?

    Can VAT or other tax be included in QNZPE?

    No, the Grant is paid on QNZPE that is net of New Zealand Goods and Services Tax. This principle extends to taxes (e.g. VAT) that are paid on goods purchased overseas and then brought to New Zealand for use on the production.

  • 18. GST

    All figures set out in these criteria are net of GST. As such, the International Grant is calculated in relation to amounts that are net of GST. However, New Zealand tax law requires that the International Grant is paid GST inclusive. For this reason, the International 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 in foreign currencies must be converted into New Zealand dollars at the spot rate on the date of payment or, if this is not practicable, on a monthly basis at the mid-month exchange rates published by the Inland Revenue (www.ird.govt.nz).

    FAQ: 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 New Zealand dollars in an application you should use:

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

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

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

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

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

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

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

    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.

  • 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 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 the production is structured in a way that is inconsistent with the intent of the criteria, it may be rejected by the NZSPG Panel at 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 should also be at commercial rates and be at a consistent level with the charges of other parties providing goods or services to the production who are not also investing in the production.

  • 21. Non-Accrual Basis of Expenditure

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

  • 22. Expenditure by Prior Entities

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

  • 23. Depreciating Assets

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

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

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

  • 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. Provisional Applications for Baseline Grant

    Applicants may (but do not have to) apply for provisional certification of eligibility for an International Grant unless they are applying for the 5% Uplift (see clause 26).

    Applicants with television or other non-feature film productions are strongly advised to apply for provisional certification to ensure that the proposed format meets the relevant criteria.

    A Provisional Certificate will provide a non-binding view as to whether a production meets the criteria. It will lapse six months from the date of issue, unless the production has commenced Principal Photography within that time period. In exceptional circumstances applicants may apply to the NZFC for an extension to their Provisional Certificate and may, in any event, submit a new application for provisional certification.

    FAQ: Do I have to apply for provisional certification?

    Do I have to apply for provisional certification?

    For NZFC planning purposes, applicants should provide advance notice by email to [email protected] of their intention to apply for a Grant and with approximate dates of any proposed shoot in New Zealand.

    Applications for the 20% Grant: Applicants are not required to apply for provisional certification. However, applicants with a television or non-feature film production are strongly advised to apply for provisional certification to ensure the proposed format meets the relevant criteria.

  • 26. Provisional Applications for 5% Uplift

    Applicants who wish to apply for the 5% Uplift must submit a complete provisional application prior to commencement of Principal Photography. Applicants should review the provisional application form and contact the Head of Incentives at the NZFC before submitting a provisional application.

    FAQ: Where can I find out more information about applying for the 5% Uplift?

    Where can I find out more information about applying for the 5% Uplift?

    The criteria for the 5% Uplift are set out in Appendix 2 of the Criteria.

    Applicants intending to apply must for the 5% Uplift must:

    1. (a)Contact the Head of Incentives at the NZFC prior to submitting an application; and
    2. (b)Submit a complete provisional application prior to commencement of principal photography.
  • 27. Exchange Rate Fluctuation and Pre-qualification

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

    The applicant should seek provisional certification under clause 25 and at the same time should:

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

    The application for provisional certification must be received by the NZFC within three months of the start of Principal Photography or PDV Activity (as the case may be). In the event that the start date is delayed, the applicant may reapply.

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

    If at the time the applicant submits its application for the International 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 International 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).

  • 28. PDV Grant SPV Exception 2

    Where the SPV requirement exception under clause 11.2(e) applies, the final PDV Grant application and verification process shall be as set out in this clause.

    The final application for a PDV Grant in respect of the production may only be made once all PDV Activity on the production in New Zealand has been completed. The application may not be made later than three months after Completion of the production.

    The total PDV Grant will not exceed 20% (or 25% if the applicant qualifies for the 5% Uplift) of the deemed QNZPE calculated in accordance with clause 11.2(e).

    The following information must be included with each application form:

    1. (a)Approved auditor's opinion verifying the purchase price;
    2. (b)A copy of the completed production or sample footage;
    3. (c)Statutory declaration;
    4. (d)Further information as requested.

    IRD verification of the information provided to the NZFC will be different to verification of other productions, and will likely focus more on invoices, receipts, and bank statements, as well as review of tax compliance of the processes of the applicant.

  • 29. Information Before and During Production

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

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

  • 30. Final Applications

    Applicants may submit a final application for an International Grant to the NZFC:

    1. (a)once all QNZPE on the production is completed or all that is intended to be claimed is completed;or
    2. (b)each time the QNZPE for the production has exceeded a multiple of $50 million (an interim application) provided that there is evidence that the film will be Completed. Where this occurs, a final application setting out the remaining QNZPE must also be provided once all QNZPE for the production is completed,

    provided that an applicant may not apply for an International Grant later than three months after Completion of the production (or Completion of the last production within a bundle).

    An application must be made on the relevant application form.

    In the case of bundled screen productions, applicants may only submit an application once QNZPE on all productions within a bundle is completed. However, an interim application may be made in respect of any individual production that has either: (a) completed QNZPE where such QNZPE exceeds the relevant expenditure threshold; or (b) incurred QNZPE of $50 million or more. Applicants may not apply for an International Grant later than three months after Completion of the last production within the bundle.

    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 to be 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 3 months after completion of the production.

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

    30.1Audited expenditure statement

    All costs claimed as QNZPE must be presented in an audited expenditure statement. The audit must be prepared by a person who is:

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

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

    30.2Credit list, proof of distribution, sample footage

    A final application for an International Grant must include:

    1. (a)a full final credit list; and
    2. (b)proof of distribution or exhibition arrangements.

    If the production has not been released to the public or international marketing for its imminent release has not occurred, the NZFC may request a copy of the completed production or a dated selection of footage. Applications for a PDV Grant need not include proof of distribution or exhibition arrangements, a final credit list or a copy of the completed production unless applying under PDV Grant SPV Exception 2.

    30.3Statutory declaration

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

    30.4Further information as requested

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

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

  • 31. Credit and Promotional Materials

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

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

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

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

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

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

    Yes, this is now mandatory. However, if there are exceptional circumstances which mean you are unable to provide a credit and/or provide promotional materials, you need to discuss this with the NZFC before submitting your final application. Waivers of this requirement will only be given where the applicant is genuinely not in a position to satisfy this criteria. The promotional material schedule can be viewed on the NZFC website: www.nzfilm.co.nz/resources/promotional-materials-schedule

  • 32. Confidentiality

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

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

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

  • 33. Information for Research Purposes

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

  • 34. Exit Survey

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

  • 35. Further Information

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

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

  • 36. Application Forms

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

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

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

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

    Email address:
    [email protected]

  • 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, or for the Post, Digital and Visual Effects (PDV) Grant, all PDV Activity in New Zealand. Only one entity per production is eligible for the Grant. The entity must also be a Special Purpose Vehicle (SPV) unless it falls within one of the exceptions, as per the requirements set out in Clause 11 of the Criteria.

    FAQ: Can a New Zealand Production qualify for an International Grant?

    Where can I get application forms?

    Yes, provided it meets the Criteria and provided in the case of a television or other non-feature film, it is not principally made for the New Zealand market. However, a production can only apply for one Grant (a New Zealand Grant, International Grant or PDV Grant) and if it has significant New Zealand content and otherwise meets the Criteria for New Zealand productions, then it will usually be more beneficial to apply for a New Zealand Grant.

    FAQ: Where can I get application forms?

    Where can I get application forms?

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

    Be aware that at final application stage, all above-the-line contracts and any other agreements that are submitted as attachments must be dated and signed by all parties to the agreement.

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

    How long will it take to process my application?

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

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

    Please note that:

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

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

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

    Provided the application has not yet been considered by the NZSPG Panel, you can choose to withdraw the application and then re-submit it with the additional QNZPE included. However, the additional QNZPE will need to be covered by the auditor’s report and you must re-submit the application before 3 months has expired from the completion of the production.

    FAQ: When is the Grant paid?

    When is the Grant paid?

    Once your final application has been approved you will be sent an approval letter along with a pro-forma invoice. You must then send an invoice to the Ministry of Business, Innovation and Employment including bank account details and the payment will be made into the nominated bank account within 10 business days of receipt of the invoice. The Grant must be paid into a New Zealand bank account in the name of the applicant.

Section 6 - Assessment Process

  • 37. NZSPG Panel

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

    A separate verification panel will be responsible for assessing whether productions and applicants pass the Significant Economic Benefits Test. See clause 38 for details.

    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.

  • 38. Assessment of Eligibility for the 5% Uplift

    The Significant Economic Benefits Verification Panel (SEB Verification Panel) will determine whether a production and applicant pass the Significant Economic Benefits Test and are therefore eligible for the 5% Uplift. The SEB Verification Panel will endeavour to make this determination within four weeks of receiving a complete application.

    Due to the nature of the Significant Economics Benefits Test (particularly Section D), applicants should ensure that an authorised person of the applicant is available to engage with and provide further information to the NZFC and SEB Verification Panel during the assessment process. Proposals included in the application must be valid for three months from the application date.

    Applicants who pass the Significant Economic Benefits Test will receive provisional certification and will be required to enter into a memorandum of understanding (MOU) with the New Zealand Government that will set out the basis upon which the applicant will satisfy the Significant Economic Benefits Test.

    The MOU must be finalised within 12 weeks of provisional certification unless the NZFC agrees in writing to extend the time period where there are exceptional circumstances. Any extension will be considered on a case-by-case basis and be entirely at the discretion of the NZFC. The New Zealand Government and relevant agencies will be entitled to publish a summary of the MOU (agreed with the applicant) following execution of the MOU.

  • 39. Independent Consultants

    The NZSPG Panel and the SEB Verification Panel may seek the advice of one or more independent consultants to provide an independent assessment of any matters relating to the criteria, the International Grant or the Significant Economic Benefits Test.

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

  • 40. IRD Verification and Payment of International Grant

    Payment of the International Grant is dependent on:

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

    Once a complete final application has been received, the NZFC will endeavour to process the application within three months. Payment of the International Grant will generally be made within ten business days by the Ministry of Business, Innovation & Employment upon advice from the NZFC and receipt of an invoice from the applicant. The International Grant can only be paid in New Zealand dollars to the applicant company to their New Zealand bank account.

Appendix 1 - Further Definitions And Interpretation

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

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

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

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

    Creative Producer means an individual with decision-making authority who has a key role in the creative evolution of a production and 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.

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

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

    Financing Expenditure includes expenditure connected with raising and servicing finance for the production, such as interest payments on loans to cashflow the International Grant, development loans and pre-sales or gap funding cashflowed to the production budget (but not deferrals).

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

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

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

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

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

    Principal Photography means:

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

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

    Related Entity generally means an entity that has 50% or more shareholding in common with the applicant. However, it is not intended that separate business units within a group are related entities, e.g. a broadcast or cable company will generally not be considered a related entity to a feature film company despite having the same ultimate ownership. In exceptional circumstances, where a related entity does not meet the shareholding requirement and the applicant can provide evidence of another means of association or control, the NZFC may accept that that entity is related to the applicant for the purposes of the Criteria.

    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).

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

Appendix 2 - Significant Economic Benefits Guidelines

  • Introduction

    New Zealand Screen Production Grant
    Assessment of Significant Economic Benefits - Guidelines

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

    All international productions that meet the relevant specific eligibility criteria and the general eligibility criteria for the NZSPG are able to access a grant equivalent to 20% of QNZPE.

    Certain productions may be entitled to an additional 5% (5% Uplift) if they can demonstrate significant economic benefits to New Zealand.

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

    The guidelines reflect that screen productions can raise New Zealand's profile internationally, attract high value tourists, and profile our innovative and creative people and technologies. It is expected that productions with significant economic benefits will be well placed to market, promote and showcase New Zealand. In general, the scale of the benefit to New Zealand should meet or exceed the amount of the 5% Uplift.

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

    Assessment

    The assessment of whether a production will bring significant economic benefits to New Zealand will be made on the following basis:

    • A production that receives at least 20 points out of a possible 30 points will be considered as bringing significant economic benefits to New Zealand for the purposes of the NZSPG.
    • The production must receive a minimum number of points in Section A (Expenditure) and Section D (Wider Economic Benefits).

    Certain productions will be able to fast-track to Section D (Wider Economic Benefits) where:

    • The production is a feature film with QNZPE of $30 million or more or a TV series or other format with QNZPE of $25 million or more and the applicant (or a Related Entity) or the New Zealand Creative Producer has incurred QNZPE of $100 million in the past five years; or
    • The production is a feature film with QNZPE of $150 million or more; or
    • The production is a TV series or other format with QNZPE of $80 million or more.
  • Assessment of Significant Economic Benefits - Points Test

      Points Available
    A - Amount of Past Expenditure or Expenditure on Current Production  
    Either:  

    Fast Track based on QNZPE in NZD of past expenditure or expenditure on current production

    If the production is a feature film with QNZPE of $30 million or more or a TV series or other format with QNZPE of $25 million or more and the applicant (or a Related Entity) or the New Zealand Creative Producer has incurred QNZPE of $100m or more in the past five years; or

    The production is a feature film with QNZPE of $150m or more; or

    The production is a non-feature film with QNZPE of $80m or more.

    *See Appendix 1 for definitions of Related Entity and Creative Producer.

    Fast Track to Section D
    Or:  

    A1 - QNZPE in NZD of expenditure on current production

    Feature film: A mandatory minimum $30m QNZPE (1pt). Additional point for each $10m QNZPE up to $80m.

    Non-feature film: A mandatory minimum $25m QNZPE (1pt). Additional point for each $10m QNZPE up to $75m.

    Up to 6
    Total - Section A (maximum: 6 points and minimum: 1 point) 6
    B - New Zealand Production Activity  
    B1 - Shooting - Location/Studio (50% for 1, 75% for 2, 90% for 3) Up to 3
    B2 - Picture Post-Production (50% plus) 1
    B3 - Sound Post-Production (50% plus) 1
    B4 - Digital or Visual Effects (50% for 1, 75% for 2 or $5m for 1, $10m for 2) Up to 2
    B5 - If applicable, Concept Design & Physical Effects (Period/Genre) (50% for 1, 75% for 2) Up to 2
    B6 - 75% or more of total budget is QNZPE (1 bonus point available if maximum points not achieved in B1-B5) 1
    Total - Section B (maximum: 9 points) 9
    C - New Zealand Personnel  
    To qualify, individuals must be a New Zealand citizen or permanent resident at the time the production is being made.  
    C1 - Director/Producer/Writer (1 point if 1 of 3, 2 points if 2 of 3) Up to 2
    C2 - Lead or Supporting Cast (1 point if 2 supporting cast, 2 points if 1 lead or 3 or more supporting cast) Up to 2
    C3 - Majority of Cast (75% plus) 1
    C4 - Key Production Staff - DOP, Editor, Production Designer, Composer, Sound Designer, Sound Editor, Sound Mixer, VFX Supervisor, 1st Assistant Director, 2nd Unit Director, Line Producer, Costume Designer, Key Make-up & Hair (0.5 pt per role, maximum of 3 points) Up to 3
    C5 - Majority of Crew (75% plus) 1
    C6 - 90% or more of total cast or crew are qualifying persons (1 bonus point available if maximum not achieved in C1-C5) 1
    Total - Section C (maximum: 9 points)  
    D - Wider Economic Benefits  
    Are you able to provide wider economic benefits to New Zealand or the New Zealand screen industry?  
    D1 - Marketing, promoting and showcasing New Zealand Up to 3
    D2 - Placement of New Zealand in screen production Up to 2
    D3 - Investment in New Zealand infrastructure Up to 2
    D4 - Investment in innovation, technology or knowledge transfer 1
    D5 - Skills and/or talent development 1
    For productions that fast track from Section A only.
    D6 - Other New Zealand post-production or visual effects activity
    1
    Total - Section D (maximum: 6 points and minimum: 3 points which must include 2 points from D1 and/or D2) 6
    To qualify as bringing significant economic benefits to New Zealand a production must either:
    • score a minimum of 20 points in the above points test (and meet the minimum points requirements in Sections A and D), or
    • achieve ‘Fast Track' status and meet the minimum points requirements in Section D.
    __ (out of 30)
  • Section A - Amount of Past Expenditure or Expenditure on Current Production

    Fast Track - Past Expenditure and Expenditure on Current Production

    If the production meets the criteria in this section and scores the minimum points in Section D, then it is considered to have “Fast Track” status and is not required to score any points in Sections B or C.

    Past and Current Expenditure

    If the applicant (or a Related Entity to the applicant) or the Creative Producer who is a New Zealand citizen or permanent resident* has incurred QNZPE in New Zealand dollars of $100 million or more on another production or productions in either (at the applicant's option):

    • the five years preceding the date of the provisional application, provided Principal Photography on the current production starts no later than 12 months after the date of the provisional application; or
    • the five years preceding the date of the final application for the current production.

    *see Appendix 1 for definitions of Related Entity and Creative Producer.

    Past QNZPE will be measured on the total QNZPE approved for the applicant (or a Related Entity of the applicant) or the Creative Producer by the Large Budget Screen Production Grant Panel, SPIF Committee or NZSPG Panel.

    The production the subject of the application must also have a minimum QNZPE of NZ$30 million for a feature film or NZ$25 million for a television series or other non-feature film format.

    Expenditure on Current Production

    Feature films with QNZPE (in New Zealand dollars) of $150 million or more.

    Non-feature films with QNZPE (in New Zealand dollars) of $80 million or more.

    A1: Points -Expenditure on Current Production

    Feature films with QNZPE (in New Zealand dollars) of:

    Greater than or equal to $30 million but less than $40 million 1 point
    Greater than or equal to $40 million but less than $50 million 2 points
    Greater than or equal to $50 million but less than $60 million 3 points
    Greater than or equal to $60 million but less than $70 million 4 points
    Greater than or equal to $70 million but less than $80 million 5 points
    Greater than or equal to $80 million 6 points

    TV and other non-feature films with QNZPE (in New Zealand dollars) of:

    Greater than or equal to $25 million but less than $35 million 1 point
    Greater than or equal to $35 million but less than $45 million 2 points
    Greater than or equal to $45 million but less than $55 million 3 points
    Greater than or equal to $55 million but less than $65 million 4 points
    Greater than or equal to $65 million but less than $75 million 5 points
    Greater than or equal to $75 million 6 points

    For provisional applications, applicants must submit a detailed spreadsheet of the production's estimated QNZPE in New Zealand dollars. Applicants may use the budgeted exchange rate or the Inland Revenue's mid-month rate for the month in which the application is lodged (www.ird.govt.nz). Applicants who are concerned that the minimum expenditure thresholds for this test may not be achieved solely due to exchange rate fluctuations may apply to pre-qualify. Please see clause 27 of the criteria for details of this process.

    Please note that final assessment of whether a production meets the above thresholds will be based on the level of QNZPE approved at final application stage. If this is below the estimated QNZPE, this may adversely impact on the points scored and may affect the production's eligibility for the 5% Uplift.

  • 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.

    If, due to exceptional circumstances beyond the applicant's control, the actual percentage of shooting days carried out in New Zealand or the actual percentage of QNZPE is less than the estimated percentage included in a provisional application and this results in the applicant failing to pass this points test, then the applicant may make a case for reconsideration of its eligibility for the 5% Uplift.

    B1 - Shooting - Location/Studio

    Up to 3 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.
    • 3 points can be awarded if at least 90% 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

    1 point will be awarded for the picture post-production if at least 50% of the total budget for picture post-production 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 movemnt is charged to a New Zealand entity and the data originates from New Zealand)
    • Film scanning/telecine
    • Stereoscopic 3D conversion

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

    • Film recording
    • Film restoration and repair
    • Titles, credits
    • Stills manipulation
    • Grading/colour timing
    • Negative inspection, negative pulling cutting, logging, assembly cutting and pulling and assembling of scan rolls
    • Film/digital opticals
    • Creation of master film delivery ites, e.g. interpositives and internegatives (not including distribution copies)
    • Digital negative developing, processing and print from digital negative
    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 notlimited to ISDN connections provided the cost is charged to a New Zealand entity
    • Sound design including any additional sound recording recorded by a sound editor
    • Sound tracklay
    • Foley effects and recording
    • Sund mixing/re-recording (not including international versioning for distribution)
    • Creation of master sound deivery 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 total budget for this activity is QNZPE.

    B4 - Visual Effects Production

    Either:

    • 1 point can be awarded if at least 50% of the total budget for Visual Effects Production is QNZPE.
    • 2 points can be awarded if at least 75% of the total budget for Visual Effects Production is QNZPE.

    Or:

    • 1 point can be awarded if at least $5 million QNZPE is spent on Visual Effects Production.
    • 2 points can be awarded if at least $10 million QNZPE is spent on Visual Effects Production.

    Visual Effects Production includes:

    Visualisation

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

    VFX Photography and Data Capture

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

    CGI/2D/3D

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

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

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

    B5 - 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.
    • 2 points can be awarded if at least 75% 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.

    B6 - Bonus point for proportion of budget that is QNZPE

    1 point can be awarded if at least 75% of the total budget is QNZPE. The total budget must include all above-the-line and below-the-line items usually included in budgets for similar productions.

  • Section C - New Zealand Personnel

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

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

    C1 - Director/Producer/Writer
    • 1 point can be awarded if at least 1 of the producer, director or writer are qualifying persons;
    • 2 points can be awarded if at least 2 of the producer, director or writer are qualifying persons.

    Where there are multiple directors (for example for a series of episodes), 1 point can be awarded if at least 66% of the directors are qualifying persons or if the majority of the episodes are directed by qualifying persons.

    Where there is more than one director (for example for a feature film), applicants will be asked to make a case for who is the lead, except where there are joint and equal directors in which case an applicant may choose either to be the lead. The lead director will be determined by taking into account factors including: the person who takes the credit in the production, the creative input and time spent working on the production.

    Where there is more than one producer, applicants will be asked to make a case for who are the lead producers. A producer is defined as an individual with decision-making authority who plays an active role throughout the pre-production, production and post-production of a production and assumes responsibility for the physical process of production and carrying through practical and financial arrangements for the making of the production. For feature films, executive producers and associate producers will generally not be considered lead producers. For television series, executive producers may be considered lead producers. The lead producer will be determined by taking into account factors including: the person who takes the credit in the production, the creative input and time spent working on the production. Producers for television series, line producers and unit production managers are considered under C4.

    Where there are multiple scriptwriters (for example for a series of episodes) 1 point can be awarded if at least 66% of the scriptwriters are qualifying persons or if the majority 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 production, creative input on the script and time spent working on the script.

    C2 - Lead and/or Supporting Cast
    • 1 point can be awarded if two of the supporting cast are qualifying persons.
    • 2 points can be awarded if one of the lead actors or three of the supporting cast are qualifying persons.

    Applicants will be asked to make a case for who are the lead and supporting cast. The lead and supporting cast will be determined by taking into account factors including: the number of days worked in front of the camera, the size and importance of the role (with reference to line count, number of scenes, shoot days, and whether a performer is being paid a weekly rate), how the cast member is described in the relevant contract, amount of screen time, who the actor is taking direction from, marquee value and the centrality of the actor's role in the story. As a guide, an actor who is described as a “day player” or “bit player”, or who is not required to speak more than six lines of dialogue or more than fifty words, or who is required to mime, would not be considered supporting cast.The actor must receive a credit and appear in the final production.

    For animations only: this will include actors voicing characters.

    For documentaries only: this will include the presenter, narrator, or other person who participates or appears in or is otherwise the subject of a documentary.

    C3 - Majority of Cast

    1 point can be awarded if at least 75% 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 production.

    For the purposes of this test, ‘extras' means: a person who appears in a production 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.

    C4 - Key Production Staff

    Up to 3 points will be awarded for key production staff, on the following basis:

    • 0.5 points can be awarded for each of the key production staff who are qualifying persons.

    Key production staff are: the lead cinematographer, the lead production designer, the lead editor, the lead digital/visual/special effects supervisor, the composer, the lead sound designer, the lead sound editor, the lead sound mixer (either production sound recordist or re-recording mixer, but not both), the first assistant director, the second unit director (if applicable), the line producer or unit production manager, the costume designer, key make-up and key hair (or key make-up and hair if the role is performed by one person).

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

    C5 - Majority of Crew

    1 point can be awarded if at least 75% of the production crew are qualifying persons.

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

    Whether a person is or is not in the production crew will be determined by taking into account factors including: whether he or she is contracted by the production company to perform services on the film; and whether he or she is given industry-standard on-screen credits.

    C6 - Bonus point for Total Cast or Crew

    1 point can be awarded if at least 90% of the cast (as defined in C3) or production crew (as defined in C5) are qualifying persons.

  • Section D - Wider Economic Benefits

    In the case of each of these categories, the intention is that the benefits will be material and over and above something that might have occurred in the usual course of a production.

    All productions must gain a minimum of 3 points in Section D including a minimum of 2 points from D1 and/or D2.

    If you wish to apply for the 5% Uplift, please contact the Head of Incentives at the NZFC in the first instance.

    D1 - Marketing, promoting and showcasing New Zealand

    Intent of benefit
    New Zealand has achieved considerable success through being able to associate productions made here with New Zealand and through communicating the message “made in and with New Zealand”. At its most developed, such as The Hobbit, New Zealand has been showcased most effectively, with direct benefit for our tourism and screen industries.

    Broadly speaking, New Zealand wishes to:

    1. 1.Associate the screen production with New Zealand in order to showcase New Zealand; and
    2. 2.Link locations used in the production with New Zealand; and
    3. 3.Utilise the production to highlight the talents of the New Zealand screen industry involved; and
    4. 4.Leverage the production or its associated companies to access channels and markets to showcase New Zealand as more than a screen production destination.

    Points
    Up to 3 points are available to market, promote or showcase New Zealand resulting in positive brand recognition. Different productions have different showcasing value for New Zealand and this is recognised in the points. One point is available for productions that can work closely with New Zealand government agencies or related entities to showcase New Zealand as a screen production destination. Two points are available to productions that can work closely with New Zealand government agencies or related entities to showcase another aspect of New Zealand e.g. tourism, music, education, investment, technology. The largest number of points is available when a high value strategic partnership can be developed with a number of New Zealand government agencies or related entities.

    Imaginative proposals are encouraged including cross-sector marketing or initiatives that may open up new markets to New Zealand or give New Zealand better access to capital, tourism, screen or other markets.

    The table below provides further information on the 1 to 3 points scale for D1. Further examples are available on the NZFC website.

    Requirements Points
    Agree a detailed marketing strategy with relevant New Zealand government agencies or related entities to enable New Zealand to be showcased as a screen production destination. At a minimum this would include enhanced access to the production (during and post shoot) including the ability to interview key cast and crew, access key production statistics and access to screen production assets (e.g. publicity materials). 1 point

     

    Some productions are better placed than others to be able to showcase New Zealand and provide marketing opportunities of significance. It is expected that applicants able to achieve two or three points in D1 will be able to demonstrate the geographic and demographic markets their production (or content promoting that production or New Zealand in general) will reach and that these align with New Zealand's interests. They will also be able to demonstrate their capacity to work with New Zealand to realise effective marketing partnerships.

    Agree a detailed marketing strategy with a New Zealand government agency or related entity to enable New Zealand to be showcased as more than a screen production destination. This would involve an agreement with one or more non-screen New Zealand government agencies or related entities enabling them to generate its own marketing content. This agreement may include:

    1. 1.Access to screen production assets including branding, imaging and moving footage for use in paid, owned and earned media.
    2. 2.The ability to interview key cast and crew while they are in New Zealand for use in paid, owned and earned media.
    3. 3.Opportunities for media to visit and experience location shooting (when appropriate).
    4. 4.Opportunities around the premiere and release of the screen production worldwide.
    5. 5.Opportunities to access the fan base of the production.
    2 points

     

    As above, but with a larger number of New Zealand government agencies or related entities. The Hobbit is an example of this type of partnership.

    It is expected that only very large budget, high profile productions would be able to gain three points, e.g. tent-pole films or established series.

    3 points

     

    Productions applying for the 5% Uplift must disclose any other funding received by other central or local government agencies for the same production and the SEB Panel can take this into account when deciding if further government funding via the 5% Uplift is warranted.

    D2 - Placement of New Zealand in screen production

    Intent of benefit
    New Zealand recognises that some productions offer the possibility to incorporate New Zealand on-screen, and that this can have equivalent benefits to marketing partnerships if it is of sufficient weight.

    Points
    Up to 2 points will be awarded if an association of significance with New Zealand can be created on-screen, which would lead to New Zealand brand recognition in a significant geographic and demographic market that aligns with New Zealand's interests.

    In order to achieve this,the screen production may utilise:

    • New Zealand as a setting and, if identifiable as New Zealand and depending on the significance (e.g. a reasonable amount of screen time, not a passing reference), then points may be awarded;
    • a New Zealand performer to play a New Zealand character in a significant and prominent role (lead or supporting) and depending on the significance or prominence of the role, then points may be awarded;
    • other possibilities the applicant wishes to propose.

    In general, one point will be for the prominent placement of a New Zealand setting or character. For television, the number of episodes of the series and the number of episodes that the New Zealand setting or character features in will be taken into account.

    In general, two points would be awarded if there is both a New Zealand setting and a prominent New Zealand character, e.g. the film or series is mostly set in New Zealand with a lead New Zealand character.

    D3 - Investment in New Zealand infrastructure

    Intent of benefit
    New Zealand is interested in developing its screen industry infrastructure (both physical and business capability) in order to enhance the offering to future productions. We recognise that incoming productions can assist New Zealand with this and in a number of cases, such developments constitute a legacy where, but for the production, this investment would not have occurred.

    Points
    Up to 2 points will be awarded for:

    • physical infrastructure which the applicant is able to facilitate being developed and left in New Zealand to be available to further productions;
    • merchandising or ancillary business opportunities for New Zealand companies that will enable those companies to grow in scale or develop new skills or connections (associated games, merchandising contracts, related transmedia production, app developments and so on).

    The ability to gain 2 points in this section will depend on the significance of the investment. Major capital investment or ancillary business activity is likely to qualify for 2 points, more minor proposals for 1 point. We also anticipate that significant commercial developments could be undertaken with New Zealand partners.

    Examples:
    New Zealand is aware of partnerships around the world which have resulted in the construction of specialist soundstages, or specific equipment or facilities such as water tanks. This category can also include providing significant equipment to an educational institution at the end of production.

    D4 - Investment in innovation, technology or knowledge transfer

    Intent of benefit
    New Zealand recognises that some productions will be well-placed to extend New Zealand's knowledge base within the screen sector or to other sectors by:

    • use of innovative production technologies not already found in New Zealand;
    • transfer of know-how to New Zealand personnel;
    • entering into commercial partnerships to develop new technologies or methods;
    • research and development initiatives.

    Points
    1 point will be awarded for productions that can demonstrate one or more of the above outcomes.

    Examples of this kind of activity will be published on the NZFC website from time to time.

    D5 - Skills and/or talent development

    Intent of benefit
    New Zealand is keen to grow its capability in key creative roles such as above-the-line personnel and heads of department. It is expected that most productions will take on trainees in junior roles or that crew may “step up” into new roles over a period of time. To gain points under this section, the focus should be on skills and/or talent development that would not happen in the normal course of a production and is focused at developing more senior personnel. The length of the opportunity, the demand for the skills, and the cost to the production will be taken into account when assessing the value of the opportunity.

    Although welcome, opportunities like one-off masterclasses or workshops will not in themselves be enough to gain a point.

    Points
    1 point will be awarded for productions that can demonstrate the above outcomes.

    Examples:

    • Paid internships (e.g. writing, directing, producing).
    • Mentoring opportunities (in areas of high demand e.g. production accountancy, line producing, head of department roles).

    For productions that fast-track from Section A only

    D6 - New Zealand post-production and visual effects activity

    Intent of benefit
    New Zealand wishes to encourage productions to undertake as much New Zealand post-production or visual effects activity as possible..

    Points
    1 point will be awarded if:

    • at least 50% of the total budget for picture post-production for the production is QNZPE and at least 50% of the total budget for music or sound post-production is QNZPE

    OR

    • at least 75% of the total budget for either:
      • picture post-production; or
      • music; or
      • sound post-production
      is QNZPE

    OR

    • at least 50% of the total budget for Visual Effects Production is QNZPE.

    For definitions of picture post-production, music, sound post-production and Visual Effects Production please refer to Section B.

Appendix 3 - PDV Activity

  • Introduction

    QNZPE in relation to PDV Productions only, means QNZPE that is directly or necessarily related to PDV Activity. The items below are examples of activities that are considered to be PDV Activity. If an item is not on the list below, please contact the Head of Incentives.

    QNZPE necessarily related to PDV Activity includes but is not limited to fees and expenses of personnel, hire of studio and office space, purchase of hire or equipment, depreciation of assets (see clause 9.2).

    FAQ: Can costs on PDV activities which are not listed in Appendix 3 of the Criteria count as QNZPE?

    Can costs on PDV activities which are not listed in Appendix 3 of the Criteria count as QNZPE?

    Yes, this list is not exhaustive. If you incur costs on an activity that is not included in this list, but which you consider to be a ‘PDV’ activity, please contact the Head of Incentives at the NZFC to find out whether the expenditure is QNZPE.

    FAQ: If my PDV supplier sub-contracts part of its services outside New Zealand, do these costs count as QNZPE?

    If my PDV supplier sub-contracts part of its services outside New Zealand, do these costs count as QNZPE?

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

    This requirement is particularly relevant to PDV work where the majority of the expenditure is often payable to one supplier. The applicant for a PDV Grant must require suppliers of PDV Production services to provide invoices which are broken down to show the cost of New Zealand-based services and non-New Zealand-based services, so only services in New Zealand are QNZPE.

  • Post-Production

    Picture Post-Production

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

    Music

    • Composing, scoring, performing, recording

    Sound Post-Production

    • 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 entity
    • Sound design including any additional sound recording recorded by a sound editor
    • Sound tracklay
    • Foley effects and recording
    • Sound mixing/re-recording (not including international versioning for distribution)
    • Creation of master sound delivery items (not including distribution copies or international versioning)

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

    Film Laboratory

    • 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) li>
    • Digital negative developing, processing and print from digital negative
  • Visual Effects Production

    Physical Effects (only where principal photography is outside New Zealand)

    • Specialist prosthetics, models, props and costumes primarily used as on-set visual effects aids
    • Specialist prosthetics, models, props and costumes which are scanned or photographed to be used as reference for digital creatures, doubles, environments and other digital effects

    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 storyboads outlining placement, movement, shape and elements needed for the completion of VFX shots including for pre-visualisation, technical visualisation or post-visualisation

    VFX Photography and Data Capture

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

    CGI/2D/3D

    • 2D and 3D animation (see note 1 below)
    • Digital creatures
    • Digital doubles
    • Digital environments
    • Other digital effects
    • Rotoscoliing
    • Digital matte liainting
    • Comliositing
    • 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.

    Other

    • Film scanning for visual effects
    • Licence fees for stock footage (provided copyright is held by a New Zealand Tax Resident)
    • Library and sound clearances (provided copyright is held by a New Zealand Tax Resident)