Film Tax Incentives in Puerto Rico Eligible Activities:
● Feature-length films
● Series, Mini-Series, including pilots
● Video Games
● TV programs, including reality shows
● Stand-alone post-production
● Film festivals
● Music Videos
● Live Events
“Puerto Rico boasts one of the most robust film incentive programs in all of Latin America and the Caribbean. In a nutshell, the region offers a 20 percent tax credit on payments made to above-the-line nonresidents, including producers, directors, writers and talent. Sweetening the deal is a 40 percent rebate on payments made to Puerto Rican residents for below-the-line services.”
John Hecht, The Hollywood Reporter
The Puerto Rico Incentives Code provides for production incentives in the form of transferable tax credits equal to the sum of:
- 40% of payments to residents of Puerto Rico
- 20% of payments to non-residents
- 15% of payments to residents of Puerto Rico, when a local producer controls the IP of the project, is responsible for its financing and production, and is entitled to 30% or more of the “producers’ net”, and either the director, cinematographer, editor, production designer, post-production supervisor, or the line producer is a resident of Puerto Rico.
- Tax credits are allowed to be used against 100% of a person’s tax liability, which maximizes their transfer value.
- The Film Program will accept physical applications until the Department of Economic Development approves regulations. In the future, online applications will be accepted and attorneys will be allowed to issue “pre-eligibility reports” for an expedited approval process.
- There is no principal photography requirement.
- A Grant reserves the tax credit for each project, which is in the nature of a contract with the Puerto Rico Department of Economic Development and Commerce.
- Grants under Act 27-2011 will be grandfathered, which means that the corresponding tax credits under such grants will be calculated and granted under the rules of Act 27-2011.
- There is a strong demand for tax credits, which sell for an average of 90% of face value. There is no recapture against buyers.
– No cap on credits for payments to Non-Residential Talent. The annual cap on credits for payments to Puerto Rico Residents is $50 million.