Your guide to production in Brazil
Insider knowledge, essential details, and first-hand tips on filming in Brazil.
Pursuant to Article 1 of the Federal Act 8685 of 1993 (“Audiovisual Act”) taxpayers can acquire an equity participation in independent Brazilian films through the acquisition of securities issued by financial institutions, for an amount up to 3% (6% in the case of individuals) of their income tax. Under Article 1(A) of the Audiovisual Act, taxpayers can deduct from their income tax all amounts invested in sponsoring Brazilian independent films, with a limit of 6% of income tax payable for individuals and 4% for legal entities. Article 3 of the Audiovisual Act allows distribution companies to obtain a 70% tax deduction if they invest the equivalent amount in the production of independent Brazilian feature films, television films or series. For more information please visit the Brazilian Film Commission Network website.
Film Production Rebate
A rebate (or grant) is funds paid to the production company based on the amount of qualifying expenditures, or jobs created in the state or country by the project. The production company does not need to file a tax return for rebates.
Film Refundable Tax Credits
A refundable tax credit is similar in function to a rebate, however, the production company must file a tax return to claim it, and receive a credit for taxes owed. Tax credits can sometimes be used as collateral to obtain a loan so that the production company receives an advance, which is usually discounted.
Film Transferable Tax Credits
A transferable tax credit may be sold or assigned to a local taxpayer. Some states offer transferable tax credits, which allow production companies to sell or get a refund for tax credits that they are not able to use. Many times brokers are used to perform these transactions.
Film Non-Refundable, Non-Transferable Tax Credits
This type of tax credit can be used to offset a production company’s current tax liability, and can be carried forward for a set time, but not transferred to third parties.
The information stated herein is for reference only and based on a source using data as of January 2015. Make sure you consult a qualified tax adviser and professional who is familiar with tax incentive programs to determine the best fit for your project.