The VFX industry in Ireland welcomed the announcement made by Minister Pascal Donohoe in his Budget speech on 7 October 2025 that as part of this budget cycle, a focused enhancement to the Section 481 tax incentive will be introduced.
The publication of Finance Bill 2025 on 16 October 2025 has provided additional details on how the enhanced incentive will operate. We have summarised the key provisions below. Additional information will be available in due course when the regulations governing the uplift are published. The uplift is subject to EU State aid approval and a commencement order by the Minister for Finance.
The relief
The credit will operate as an enhancement to the existing Section 481 tax credit framework. Where the film is considered a ‘visual effects project’, up to €10 million of eligible Irish expenditure on ‘relevant visual effects work’ can qualify for an uplifted tax credit rate of 40% (from 32%).
Visual effects project
A ‘visual effects project’ is defined as being a qualifying film where either:
- The production by the qualifying company (Irish SPV) consists wholly or mainly of relevant visual effects work with at least €1 million of eligible expenditure incurred on relevant visual effects work, or
- The qualifying company incurs eligible Irish expenditure of at least €1 million on relevant visual effects work.
Relevant visual effects work
A key factor in considering the type of costs which will qualify for the relief will be whether the cost is incurred on relevant visual effects work. Relevant visual effects work is defined as “… work consisting of such visual effects processes as may be specified in regulations made under subsection (2E)”. The regulations referred to in the definition are unlikely to be published until the commencement order is signed by the Minister for Finance.
However, ‘visual effects’ is broadly defined in the draft legislation as “… the use of computer technology to digitally create or manipulate content whether such content is for inclusion in a film or within filmed footage for inclusion in a film”.
Cultural certification and payment details
Where a production intends to claim the enhanced 40% tax credit, they must indicate this intention when submitting their application for certification to the Department of Culture, Communications and Sport.
Projects which will qualify for the enhanced 40% credit are still entitled to make a claim for the budgeted film corporation tax credit in advance of completion of the production which is based on up to 90% of the final tax credit, however any claim must be made on the basis of the 32% film corporation tax credit rate. On completion, the final claim should be made on the basis of the 40% tax credit provided the project qualifies for the uplift. Where eligible expenditure on relevant visual effects work exceeds €10 million, the excess expenditure over this €10 million will still qualify for the 32% credit.
Saffery is the leading expert advising the film and TV sector in Ireland. If you have any questions, please get in touch with Sinéad McHugh.
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