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Mexican president presents tax incentive plan for movies
Expect more foreign films to be shot here in Mexico in the coming years after a tax rebate plan gets implemented. This $20-million tax incentive program aims to lure foreign film productions to Mexico and make it Latin America's film production center.
This was announced by Mexican President Felipe Calderon at the Baja Studios in the state of Baja California, where the blockbuster film "Titanic" was mostly produced. Aside from that film, Peter Weir's "Master and Commander: Fair Share of the World" was also shot in the studio.
Under the program, tax rebates of about 7.5% will be given to film productions whose budget exceeds 70 million pesos (or about $5.5 million). For the Mexican film industry, where the average production cost is around $2 million, this can already be considered to be a high-budget film. This program is managed by the state-run film financing agency Imcine and investment body ProMexico. The budget for the rebate program, meanwhile, will be doubled to $40 million in the coming years.
But there is, of course, a catch. In order to qualify for the tax rebate program, the film's producer must contact a local film production agency. On top of this, the producers of the film may also write off another 10% in IVA, Mexico's version of the value-added tax. That represents a maximum of about 17.5% in tax rebates if the foreign film producers choose to produce their films in the country. That's definitely a sweet deal that will be very difficult to resist. That means a lot of savings for the film producers, savings that can be used in other aspects of film making such as marketing and promotion, for example.
If the program succeeds, Mexico will definitely turn out to be Latin America's Hollywood, and Hollywood's own second center. I do wish it turns out that way so that there will be more reasons for expats to stay in the country. Who would like to see another Titanic in the works in your backyard?
This was announced by Mexican President Felipe Calderon at the Baja Studios in the state of Baja California, where the blockbuster film "Titanic" was mostly produced. Aside from that film, Peter Weir's "Master and Commander: Fair Share of the World" was also shot in the studio.
Under the program, tax rebates of about 7.5% will be given to film productions whose budget exceeds 70 million pesos (or about $5.5 million). For the Mexican film industry, where the average production cost is around $2 million, this can already be considered to be a high-budget film. This program is managed by the state-run film financing agency Imcine and investment body ProMexico. The budget for the rebate program, meanwhile, will be doubled to $40 million in the coming years.
But there is, of course, a catch. In order to qualify for the tax rebate program, the film's producer must contact a local film production agency. On top of this, the producers of the film may also write off another 10% in IVA, Mexico's version of the value-added tax. That represents a maximum of about 17.5% in tax rebates if the foreign film producers choose to produce their films in the country. That's definitely a sweet deal that will be very difficult to resist. That means a lot of savings for the film producers, savings that can be used in other aspects of film making such as marketing and promotion, for example.
If the program succeeds, Mexico will definitely turn out to be Latin America's Hollywood, and Hollywood's own second center. I do wish it turns out that way so that there will be more reasons for expats to stay in the country. Who would like to see another Titanic in the works in your backyard?
Monday, July 5, 2010
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