Mexico, Film Financing and Television Programming: A Taxation Guide

Mexico, Film Financing and Television Programming

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Currently, there are no specific tax laws regulating film financing and television programming in Mexico. A tax incentive to promote national film production was introduced in 2005 and modified in 2007 (this tax incentive has not been subject to any material changes to date). This incentive is available to all entities and individuals and consists of a tax credit equivalent to the amount invested in national cinematography projects against the income tax payable in that same year. This credit shall not exceed 10 percent of the income tax payable in the previous tax year. Starting 2011, a similar tax credit is also available for investments in national theater projects. It is worth mentioning that if the credit is greater to the income tax of the year, the difference may be used to offset income tax of the 10 following years until depleted.

Someone undertaking cinematography film production and television programming in Mexico is subject to the general Mexican tax laws in force. This chapter looks at these general laws. Mexico’s tax legislation comprises several laws containing provisions relating to each type of tax. Taxes are usually levied on income, capital, and certain transactions, as well as on income derived from specific activities. 

The fundamental legal structure of the country’s taxation system is defined by the Mexican Constitution, which establishes procedures whereby Congress enacts tax laws. In addition to special tax laws, the most important one being the Mexican Income Tax Law, there are some basic laws, which relate the general administration of the system, such as the Federal Revenue Law and the Federal Tax Code. Most of the laws are supplemented by a series of regulations and general rules issued by the tax authorities, which provide more information on specific procedures and interpretation. 

The Federal Labor Law and its associated regulations govern labor relations. The law provides for minimum working conditions and rights, which must be borne by the employer, regardless of whether the employees are unionized or not. The employees cannot waive such provisions under any circumstance. The law is applicable to all employees in Mexico, regardless of their nationality.

Regarding the film and television industries, the Federal Cinematographic Law and its regulations, as well as the Federal Radio and Television Law apply to regulate the general framework and functioning of these industries in Mexico. 

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