Puerto Rico

Puerto Rico Film Incentive Overview

The Puerto Rico Film Incentive offers up to 40% tax credits on local production costs and 20% on non-resident talent. As a U.S. territory, the Puerto Rico Film Incentive gives filmmakers access to American legal protections while benefiting from Caribbean scenery.

Qualifying for the Puerto Rico Film Incentive involves working with a local service provider and gaining pre-approval from the Puerto Rico Film Commission. The Puerto Rico Film Incentive applies to feature films, series, and commercials.

With strong infrastructure and U.S. compatibility, the Puerto Rico Film Incentive makes high-quality production accessible. Producers benefit from fast processing and transferable credits.

Whether shooting in Old San Juan or lush rainforests, the Puerto Rico Film Incentive lets you do more with less.

Hoodlum Introduction

Hoodlum Film Fixers manages every element of the Puerto Rico Film Incentive, from budgeting to credit monetization. We know how to meet the thresholds and timelines of the Puerto Rico Film Incentive program.

With Hoodlum, your access to the Puerto Rico Film Incentive is secure, fast, and optimized for savings.

Incentives Offered

Puerto Rico offers attractive incentives for film productions, including:

Tax Credits:

• 40% on payments to Puerto Rico resident companies and individuals, with an annual limit of $50,000,000 (expandable up to $350,000,000 for projects in Film Development Zones)
• 20% on payments to non-resident “Above-the-Line” talent, including actors, producers, directors, and writers, with no annual cap

Tax Exemptions:

• 4% fixed income tax rate on income derived from production
• 100% exemption on dividend distributions
• 90% exemption from personal property taxes and real property taxes
• 100% exemption on municipal license taxes, construction taxes, and excise taxes on imported articles

Eligibility Criteria

Project Eligibility:

1. Film types: Feature films, short films, documentaries, television programs, series, music videos, commercials, and other productions
2. Minimum spend: $100,000 per project ($50,000 for short films) in Puerto Rico

Applicant Eligibility:

1. Business registration: The applicant must register their business in Puerto Rico
2. Tax compliance: The applicant must comply with Puerto Rico’s tax laws and regulations

Project Requirements:

1. Production activities: The project must involve production activities in Puerto Rico, such as filming, post-production, or other eligible activities
2. Economic impact: The project must demonstrate a positive economic impact on Puerto Rico

Additional Requirements:

1. Application submission: The applicant must submit a detailed application, including financial information and project plans
2. Approval: The Puerto Rico Film Commission must approve the project before production begins

Minimum Qualified Production Expenditure (QPE) per Project

The minimum QPE in Puerto Rico varies by project type:

• Feature films and most productions: $100,000
• Short films: $50,000
• Documentaries: $25,000

Accepted Categories of Production

The Puerto Rico Film Rebate Scheme accepts the following types of productions:

1. Feature films
2. Short films
3. Documentaries
4. Television programs
5. Television series
6. Music videos
7. Commercials
8. Other productions (potentially including web series, animations, and more)

Qualifying Production Expenditures (QPE)

Pre-Production Expenditures:

1. Script development
2. Storyboarding
3. Location scouting
4. Casting
5. Talent fees (for services performed in Puerto Rico)
6. Pre-production crew (salaries, wages, and benefits)

Production Expenditures

Cast and Crew Salaries and Fees:

1. Actor fees
2. Director fees
3. Producer fees
4. Crew member salaries and wages

Professional Fees:

1. Director’s fees
2. Producer’s fees
3. Screenwriter’s fees
4. Other professional services fees

Labour Costs:

1. Salaries and wages for cast and crew members
2. Benefits and payroll taxes
3. Fees for services performed by:
   • Actors
   • Directors
   • Producers
   • Writers
   • Other crew members

Equipment Rental Fees:

1. Camera equipment rentals
2. Lighting equipment rentals
3. Sound equipment rentals
4. Grip equipment rentals
5. Other production equipment rentals

Location Fees:

1. Fees for using locations in Puerto Rico, including:
   • Private properties
   • Public spaces
   • Government-owned facilities
2. Permits and licenses related to location use

Wardrobe and Costume Expenses:

1. Costume design and creation
2. Costume rental fees
3. Costume purchase
4. Wardrobe maintenance and alteration

Set Design and Construction Costs:

1. Set design fees
2. Set construction materials and labor
3. Set dressing and props
4. Set decoration

Special Effects and Stunts Expenses:

1. Visual effects (VFX)
2. Special effects (FX)
3. Stunt coordination and performance
4. CGI (Computer-Generated Imagery)

Catering, Craft, and Services Costs:

1. Catering services
2. Craft services (snacks, beverages, etc.)
3. Food and beverage costs

Specialized Services:

1. Animation and visual effects services
2. Sound design and editing services
3. Music composition and scoring services
4. Post-production services (editing, color grading, etc.)

Accommodation and Transportation Costs:

1. Hotel accommodations for cast and crew
2. Transportation costs, such as:
   • Vehicle rentals
   • Fuel
   • Parking fees
   • Airfare (if directly related to production in Puerto Rico)

Travel:

1. Airfare
2. Ground transportation (car rentals, taxis, etc.)
3. Other travel-related expenses (hotels, meals, etc.)

Miscellaneous:

1. Office expenses
2. Insurance premiums
3. Permits and licenses
4. Other production-related expenses

Post-Production Expenditures

1. Editing services
2. Visual effects (VFX)
3. Sound design and mixing
4. Color grading
5. Music composition and scoring
6. Post-production software and equipment rentals

Non-Qualifying Expenditures

Under the Puerto Rico Film Rebate program, Non-Qualifying Expenditures typically include:

1. Production costs incurred outside Puerto Rico
2. Expenses related to marketing and distribution
3. Fines and penalties
4. Expenses not directly related to the production
5. Amounts paid to entities not registered in Puerto Rico

Application Process

Step 1: Pre-Production Application

• Submit an application to the Puerto Rico Film Commission (PRFC) before production begins
• Provide project details, including script, budget, and shooting schedule

Step 2: Review and Approval

• The PRFC reviews the application to ensure the project meets the program’s requirements
• The applicant receives approval or a request for additional information

Step 3: Production and Expenditure Tracking

• Track and document all qualifying expenditures incurred in Puerto Rico
• Keep receipts, invoices, and other supporting documentation

Step 4: Post-Production Application

• Submit a final application to the PRFC after production is complete
• Provide detailed expenditure reports and supporting documentation

Step 5: Rebate Calculation and Payment

• The PRFC reviews the final application and calculates the rebate amount
• The applicant receives the rebate payment based on eligible expenditures

Required Documents:

• Project budget and schedule
• Script and shooting script
• Proof of expenditures (receipts, invoices, etc.)
• Payroll records and other supporting documentation

Tips:

• Ensure accurate tracking and documentation of expenditures
• Review program requirements carefully to ensure eligibility
• Consult with a financial advisor or production accountant familiar with the program

Ready to maximize your film incentives?

Partner with Hoodlum Film Fixers to navigate rebate programs, streamline compliance, and connect with trusted local partners. Let us handle the logistics so you can focus on creating. Contact us today to get started.