Rule 9B - Deduction in respect of expenditure on acquisition of distribution rights of feature films

Deduction for film distribution rights depends on credited receipts and exploitation timing for tax recognition.

Deduction for cost of acquiring distribution rights is allowed based on how and when exhibition rights are exploited: full deduction if rights are sold or the film is commercially released at least ninety days before year-end; otherwise deduction limited to amounts realised with any balance carried forward. Costs exclude positive print preparation and advertising. Deductions require that realised amounts or guaranteed receipts be credited in the distributor's books (or received under cash system) in the year the deduction is claimed. Sale includes lease and minimum-guarantee transfers and is deemed to occur on delivery of positive prints.