Mexico launches tax incentive program
Offering rebates of 7.5% on productions over $5.5 millionMEXICO CITY -- Mexico has launched a $20-million tax incentive program in an ambitious move to draw large-scale runaway film and audiovisual productions.
Mexican President Felipe Calderon made the announcement Tuesday at Baja Studios in Baja California, Mexico, where James Cameron's "Titanic" and Peter Weir's "Master and Commander: Far Side of the World" were shot in the studio's colossal tanks. The president said the program intends to elevate Mexico as "the capital of Latin American cinema."
Managed by state-run film financing agency Imcine and Mexican trade and investment body ProMexico, the upstart program offers tax rebates of 7.5% on film productions that exceed the amount of 70 million pesos ($5.5 million). By Mexican standards, where the average budget runs about $2 million, that is considered a high-budget production.
To qualify, foreign shingles must contract local production services. Producers also can write off an additional 10% owed for IVA, Mexico's value-added tax.
"The message is that there is a 17.5% rebate for foreign productions," said Manuel Sandoval, ProMexico's head of strategy and innovation.
He added that the fund will double next year to $40 million. In the meantime, ProMexico expects the program to have a major impact on the local economy.
"The initial resources will allow (Mexico) to attract productions with an approximate value of $260 million, which will generate more than 2,000 jobs," a ProMexico statement said.