SUPPORT PROGRAM FOR HIGH IMPACT FILM AND AUDIO-VISUAL PRODUCTION
As part of a strategy aiming to boost film and audio-visual production and to promote foreign investment in the industry and export services by strengthening Mexico's position as a preferred film destination, in March of 2010, the Federal Government announced the SUPPORT PROGRAM FOR HIGH IMPACT FILM AND AUDIO-VISUAL PRODUCTION. The objective of this initiative is to build an integral service platform that allows the country to offer a competitive edge in the career that, in the last few years, some countries have embarked upon to formulate public policy and to create advantageous industry-tailored programs of incentives to attract Hollywood runaway productions.
The program has also created an integral specialized attention scheme to service high-impact film and audio-visual production and offer foreign production a better filmmaking experience in our country.
The program also boosts the indisputable advantages of shooting in Mexico in relation to its overall low production costs, its world-acknowledged highly skilled and specialized creative talent and technical staff, its international experience, and its strategic closeness with the principal centers of film production (Hollywood), its variety of locations and world class production facilities.
Below you will find a detailed explanation of each of the elements that shape the platform of the program.
All film or audio-visual production shot in Mexico and whose primary commercial exploitation should be done out of the country are considered an "export product" and they will remain exempt from the Value-added tax (VAT).
This benefit is granted through the return of the above mentioned tax derived from production expenses incurred in the country and that can be of up to 16 % of the total of these expenses, with the submission of vouchers provided with the fiscal requisites that the Mexican law establishes.
The tax refund needs of the existence of a taxpayer registered in Mexico. It is possible to resort to established Mexican production services companies that are supported by their experience and trajectory, or it is possible to fund a production company with a Mexican partner for the film or audio-visual project.
The validation process of the vouchers claiming the return of the VAT, will be done by an authorized agency of the federal government's Tributary Administration Service (SAT).
As a complement to the 10% return of the VAT, the PROAUDIOVISUAL Fund grants to foreign and local film and audio-visual productions an incentive of up to 7.5 % on the whole of eligible expenses incurred and invoiced in Mexico, whose minimum total is equal or larger than 40 million pesos (3,125,000 USD approx.) of expense in production (principal photography) or 10 million pesos (780,865 USD approx.) in postproduction expense for feature films, visual effects VFX, animation and videogames development projects or digital interactive audio-visual works.
The policies of the PROAV Fund are very flexible in terms of the eligible expenses; the only requisite is to back the expenses with authorized fiscal invoices. Payroll payments, talent salary pay, labor union fees, equipment rental, car rental, gas expenditure, accommodation, plane tickets, feeding, purchasing of building materials, office rental, locations, accountants and office expenditure, film stock, developed material, digital intermediation, gradation of color, making of "0" print, among others are eligible expenses. Practically any expense done in Mexico related to the production and postproduction of a movie or audio-visual production is contemplated.
NOTICE: It is important to note that the sum of the percentages obtained with the return of the Value-added tax and the PROAUDIOVISUAL Fund cannot exceed 17.5 % of the whole of the approved expenses.
If you are interested in knowing more details on this incentive, we recommend you to contact us at Film-Friendly Mexico or with the Mexican Commission of Filming (COMEFILM). You can also consult the rules of the PROAUDIOVISUAL Fund and the document of Frequently Asked Questions contained in our documents of interest section.
INCENTIVES TO THE MEXICAN PRODUCTIONS
Mexico offers incentives schemes to boost the national film and audio-visual production including co-production agreements with other countries which regulate the collaboration processes between involved parties.
If you have a partnership or co-production agreement with a Mexican company, you will be able to gain access to the following funds:
Eficine 189 is a fiscal incentive for taxpayers granted by Article 189 of the ISR (Ley del Impuesto sobre la Renta) or Income Tax Law to support the production or postproduction of fiction, animated and/or documentary feature films.
Through Eficine, taxpayers investing in film projects in Mexico can obtain a fiscal credit equal to the sum of their investment, against the income tax due for the period for which the credit is granted.
A foreign company can access this incentive by being associated with a national production company under a co-production scheme.
For more information, please contact IMCINE at: email@example.com or at +52 (55) 5688 4196 or +52 (55) 5688 4770.
The Fund of Investment and Stimuli to Filmmaking (FIDECINE) is a support trusteeship to the production, postproduction, distribution and exhibition of fiction or animation feature films (of 75 minute duration or more) that grants financial support via capital risk and credit schemes.
The fund offers a system of financial supports, of guarantee, of stimuli and of investments for the benefit of the producers, the distributors and the exhibitors of locally-produced films.
The FIDECINE support scheme can be combined with the EFICINE program, this combination is not possible to do with FOPROCINE incentive.
The Fund for Quality Cinematographic Production (FOPROCINE) is a trusteeship with support calls for production or postproduction of fiction, or documentary and/or animation feature films (of 75 minutes running time or more).
The types of support that the FOPROCINE grants may be done through:
Recognition to the efficiency.