Colombia expected to launch new 35% tax credit

The incentive is intended to further entice international productions alongside the existing cash rebate

Colombia is planning a 35% tax credit for all audiovisual productions that will apply to both cinematographic and logistic expenses from January 1, 2020.

The proposed tax credit will form part of amendments to film law 1556, which will also extend the current cash rebate to TV series, not just films. The changes are yet to be fully ratified by the Colombian government but are expected to be in the coming weeks.

The full details are yet to be confirmed, but it is expected that the tax credit will not rely on Colombia’s annual budget, so the cap for the incentive will be fairly large and there will not be a cap per project. It is also estimated that the credit will be sold at 80 cents on the dollar, and because the film commission charges an administration fee, the total incentive will likely come down to about 30% for both cinematographic and logistic expenses.

International producers interested in accessing the tax credit need to bear in mind that they can’t also apply for the cash rebate. It will be one or the other.

The cash rebate is broken down as a 40% cash back on Colombian cinematographic expenses (cast, crew, extras, management, locations permits etc) and a 20% cash back on Colombian logistic expenses, such as airplane tickets, transportation, accommodation, catering, shipping etc.

The rebate comes from a fund that is annually allocated by the Colombian government and has a cap per year (usually between $4-6m), as well as a cap per project ($1-1.5m), which varies per year.

Additionally, because a foreign production is considered an export service, most of the VAT is exempt (Colombia's VAT is 19%). This will also be the case for the new tax credit.

Colombia is currently hosting Thai film maker Apichatpong Weerasethakul’s new film Memoria. The drama stars Tilda Swinton as an orchid farmer who visits her ill sister in Bogota and while there befriends a French archaeologist in charge of monitoring the construction of a tunnel through the Andes mountain ranges.

Netflix has also recently filmed its thriller Triple Frontier, starring Ben Affleck, Oscar Isaac and Charlie Hunnam, just outside Bogota. The project was serviced by Dynamo, which also worked on STX Entertainment’s action drama Mile 22, starring Mark Wahlberg.

Colombia expected to launch new 35% tax credit
Colombia expected to launch new 35% tax credit

Colombia is planning a 35% tax credit for all audiovisual productions that will apply to both cinematographic and logistic expenses from January 1, 2020.

The proposed tax credit will form part of amendments to film law 1556, which will also extend the current cash rebate to TV series, not just films. The changes are yet to be fully ratified by the Colombian government but are expected to be in the coming weeks.

The full details are yet to be confirmed, but it is expected that the tax credit will not rely on Colombia’s annual budget, so the cap for the incentive will be fairly large and there will not be a cap per project. It is also estimated that the credit will be sold at 80 cents on the dollar, and because the film commission charges an administration fee, the total incentive will likely come down to about 30% for both cinematographic and logistic expenses.

International producers interested in accessing the tax credit need to bear in mind that they can’t also apply for the cash rebate. It will be one or the other.

The cash rebate is broken down as a 40% cash back on Colombian cinematographic expenses (cast, crew, extras, management, locations permits etc) and a 20% cash back on Colombian logistic expenses, such as airplane tickets, transportation, accommodation, catering, shipping etc.

The rebate comes from a fund that is annually allocated by the Colombian government and has a cap per year (usually between $4-6m), as well as a cap per project ($1-1.5m), which varies per year.

Additionally, because a foreign production is considered an export service, most of the VAT is exempt (Colombia's VAT is 19%). This will also be the case for the new tax credit.

Colombia is currently hosting Thai film maker Apichatpong Weerasethakul’s new film Memoria. The drama stars Tilda Swinton as an orchid farmer who visits her ill sister in Bogota and while there befriends a French archaeologist in charge of monitoring the construction of a tunnel through the Andes mountain ranges.

Netflix has also recently filmed its thriller Triple Frontier, starring Ben Affleck, Oscar Isaac and Charlie Hunnam, just outside Bogota. The project was serviced by Dynamo, which also worked on STX Entertainment’s action drama Mile 22, starring Mark Wahlberg.

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