On February 16, 2026, the “Decree granting a tax incentive for film and audiovisual production” (the “Decree”) was published in the Official Gazette of the Federation (“DOF”). The objective of the Decree is to encourage the making of film and audiovisual productions in national territory through a transferable tax credit scheme, with a global annual cap of up to 400 million pesos, in force until September 30, 2030.
The incentive is structured as a tax credit of up to 30% of the total cost of the project or production process carried out in Mexico, with a limit of 40 million pesos per project/process and per benefited taxpayer, which may be transferred for consideration to other income tax (“ISR”) taxpayers under specific rules and controls. The incentive may be applied by taxpayers that are (i) Individuals taxed under the Business and Professional Activities regime; (ii) Legal Entities taxed under the General regime; and (iii) Legal Entities taxed under the Simplified Trust regime, as well as foreign residents with a permanent establishment in Mexico that carry out film or audiovisual production in national territory. Likewise, foreign residents without a permanent establishment may have access, provided that they carry out the production through an individual or legal entity resident in Mexico engaged in such activities and comply with the guidelines issued by the Technical Committee. For the purposes of the Decree, a film production project shall be understood as the set of creative, technical, logistical, and financial activities carried out in Mexico to develop, produce, or complete feature-length films whose primary purpose is their exhibition in movie theaters. In turn, an audiovisual production project comprises works whose primary output is not exhibition in movie theaters, such as series, miniseries, animation, or projects that are intensive in visual effects and postproduction, regardless of the medium or platform of distribution. Taxpayers seeking to access the incentive must comply, among others, with the following requirements: (i) being registered in the Federal Taxpayers Registry and having a tax mailbox enabled in the terms of Article 17-K of the Federal Tax Code (“CFF”); (ii) having a positive and current compliance opinion pursuant to Article 32-D of the CFF; (iii) submitting the project or production process in accordance with the guidelines issued by the Technical Committee; (iv) making expenditures in national territory that reach the minimum thresholds provided in the Decree, which range between 5 and 40 million pesos depending on the type of project or process; (v) ensuring that at least 70% of the supply is domestic; (vi) obtaining the certificate of filing of the procedure issued by the Technical Committee; (vii) obtaining the certificate of compliance for having carried out the production; and (viii) complying with the other provisions established in the Decree and in the applicable guidelines. In turn, taxpayers that obtain the certificate of compliance may determine a tax credit equivalent to up to 30% of the total cost actually incurred in national territory, considering only the essential expenditures made in the stages of development, preproduction, production, postproduction, and final delivery, in accordance with the guidelines issued by the Technical Committee. Once the tax credit has been determined, the beneficiaries may: (i) transfer it in whole or in part for consideration to domestic suppliers directly related to the production or to certain service providers with respect to goods or services that qualify as eligible expenses, in the terms of the guidelines; (ii) transfer the remainder to other ISR taxpayers for up to 70% of the total amount of the credit, provided that the transfer is made at a value not exceeding 85% of the amount transferred and that the credit does not represent more than 15% of the tax profit of the receiving taxpayer determined in the immediately preceding fiscal year; or (iii) apply it directly against the ISR incurred in the corresponding fiscal year or against provisional payments of the same fiscal year, and, where applicable, against the ISR of the two following fiscal years until it is exhausted. Taxpayers that receive the tax credit may apply it against the ISR incurred in the fiscal year in which the transfer is made or against provisional payments of the same fiscal year, without the credited payments being able to be considered again in the annual return. The amount that production companies receive for the transfer of the credit shall be taxable income for ISR purposes. In no case may the recipients of the credit retransfer it to third parties, not even through corporate reorganization structures, and the original beneficiaries may not be related parties of the recipients in the fiscal year of the transfer or in the immediately preceding one. The application of the incentive shall not be considered taxable income for ISR purposes and shall not give rise to any refund, deduction, offset, crediting, or balance in favor. Likewise, the beneficiaries are relieved of the obligation to file the notice of crediting of tax incentives provided in Article 25 of the Federal Tax Code, exclusively with respect to the incentive regulated in the Decree. The tax incentive may not be applied by taxpayers that: (i) fall within the cases provided in Articles 69, 69-B, or 69-B Bis of the CFF; (ii) have final unsecured tax liabilities or with insufficient security when they are enforceable; (iii) have their digital seal certificates restricted or cancelled in the terms of Articles 17-H and 17-H Bis of the Federal Tax Code; (iv) are in the process of liquidation; (v) apply the incentive provided in Article 189 of the ISR Law; (vi) have been the subject of a resolution determining the issuance of false tax receipts; or (vii) are linked to a criminal tax proceeding or have a final conviction for a tax offense. In the event of non-compliance with the requirements provided in the Decree or in the guidelines issued by the Technical Committee, taxpayers must pay the corresponding tax with adjustment for inflation and surcharges and render the applied incentive without effect. The Tax Administration Service may issue general rules for the correct application of the Decree. This new transferable tax credit scheme is integrated into the tax incentive policy in Mexico with a design aimed at strengthening the film and audiovisual industry, maximizing the local economic spillover, encouraging domestic supply, and ensuring controlled and transparent management of tax expenditure through budgetary limits and a specific system of validation and oversight. For additional information, please contact: Alejandro Torres, Partner: +52 (55) 5258-1072 | ajtorres@vwys.com.mx Luis Enrique Torres, Partner: +52 (55) 5258-1023 | ltorres@vwys.com.mx Ana Alpízar, Associate: +52 (55) 5258-1072 | aalpizar@vwys.com.mx
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