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The Puerto Rico Film Industry Economic Incentives Act (Act 27 Of 2011)

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What is Act 27?

The Act gives tax exemptions and tax credits for production companies of film, television and other media projects.

Act 27 Film & Media Tax Incentives Overview

On March 4, 2011, Puerto Rico enacted Act 27, known as the Puerto Rico Film Industry Economic Incentives Act. The Act gives tax exemptions and tax credits for production companies of film, television and other media projects.

Puerto Rico’s unmatched competitiveness is based on the aggressive economic and tax incentives for businesses that bring their production projects to the island. Among other benefits are: versatile locations, skilled and experienced crews, world-class infrastructure, stable institutional framework, ease of doing business, a high quality of life, and highly skilled, bilingual workforce. No other place can ensure a great return on investment the way Puerto Rico does.

At Castellanos Group P.S.C., we assist investors, studios, production companies and independent producers in taking full advantage of the unique opportunities created by the Puerto Rico Film Industry Economic Incentives Act. Contact us today if you are looking for the economic and tax incentives related to:
– national and international commercials;
– feature films, short films, and documentaries;
– television programs, mini-series, and series in episodes; or
– music videos, live performances, soundtrack recording, and dubbing, among others.
To learn more about Act 27 (Puerto Rico Film Industry Economic Incentives Act) and how it can benefit your next project, contact us at (787) 641-8447 or use our contact form.


FILM INCENTIVES OFFERED BY THE COMMONWEALTH OF PUERTO RICO UNDER THE PUERTO RICO FILM INDUSTRY ECONOMIC INCENTIVES ACT (ACT 27)

Qualifying film industry entities can benefit from the numerous tax credits and tax exemptions under Act 27 as follows:

TAX EXEMPTIONS
The tax exemptions of Act 27 for eligible production businesses are:

  • An impressive 90% tax exemption from personal or real property taxes;
  • Also, a total tax exemption (100%) to the dividends or benefits distributed by a Grantee to its investors, stockholders, members, or partners from income derived from the exploitation of activities covered under a Grant; and
  • Another total tax exemption (100%) on municipal license taxes, construction taxes, and other municipal taxes.
TAX CREDITS
A. COST PRODUCTION CREDITS (EXCLUDING DOCUMENTARIES)
In addition to the striking tax exemptions Act 27 offers, those dedicated to Film Projects or Infrastructure Projects will also benefit from a cost production credit of up to 50%, according to the following rules:

  • An additional 7% when at least one of the screenplay writers or the director is a resident of Puerto Rico;
  • An additional 6% when the Actor and Actress is Puerto Rican and plays a leading role or when the Unit Production Manager is a resident of Puerto Rico;
  • An additional 4% when at least the first assistant to the director, the cinematographer, the production designer, film composer or the editor is a resident of Puerto Rico;
  • An additional 4% when at least 5 of the following are residents of Puerto Rico: the actor and/or actress who is Puerto Rican and plays the role of a supporting character, the special effects supervisor, the visual effects supervisor, the post-production supervisor, the sound engineer, gaffer, key grip, stunts coordinator, script supervisor, or head of scenery.

B. COST PRODUCTION CREDITS OF DOCUMENTARIES
In regards to documentaries, Act 27 offers up to an additional 50% of cost productions, according to the following rules:

  • 9% when at least 1 of the screenplay writers, the director or cinematographer is a resident of Puerto Rico;
  • An additional 8% when the film composer or the editor is a resident of Puerto Rico;
  • An additional 7% when at least 2 of the following are residents of Puerto Rico: Sound Engineer, gaffer or key grip; and
  • 10% of the amounts certified by the auditor as being disbursed about the cost of production of Puerto Rico.

ELIGIBLE MEDIA PROJECTS

  • The qualifying media projects that can benefit from all of the various film incentives that Act 27 provides are feature length films; short films; documentaries; television programs; series in episodes; mini-series; music videos; national and international commercials; video games; recorded live performances; and original soundtrack recordings and dubbing.
  • It is important to clarify that Act 27 states a minimum Production Expenditures requirement in Puerto Rico of a $100,000 investment when it is an Infrastructure Project, a Large Scale Studio Operator or a Studio Operator.
  • In the case of a Film Project, Act 27 states that Puerto Rico requires a minimum Production Expenditures of a $50,000 investment.

Puerto Rico - America's Last Tax Haven

Mr. Castellanos is personally supervising all legal and consulting work done by Castellanos Group, P.S.C., including but not limited to, client development and client communication, among other areas of the law, including all new investment tax exempt laws (including Act 27) in Puerto Rico. He’s available to our clients 24/7.

Mr. Castellanos’s diverse professional experience has entailed extensive work in the following areas of law: litigation, corporate law, arbitration and mediation, constitutional law, licensing agreements, entertainment law, franchise, intellectual property, construction, health care, copyright, trademark, distribution agreements, estate planning, asset protection, estates, construction agreements, patent related work, bankruptcy (Chapter 7, Chapter 11, Chapter 13, numerous adversary proceedings and contested matters, including jury trial rights in bankruptcy proceedings, security law and regulations and FINRA arbitration, administrative proceedings, among other fields of law.

For more information or an appointment please call us at (787) 641-8447 or use our contact form.

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