The New Film Law

On July 22nd, 2010, President Leonel Fernández announced legislation that facilitates the development of the country’s film industry and subsequently appointed Ellis Perez as the Film Commissioner of the newly created General Cinemas Department (DGCINE).

DGCINE serves as the one-stop-shop for producers in administering the FTTC as well any and all relationship with Tax and Custom Authorities. It is also responsible for approving the film’s budget.

Films produced under this incentive are not bound by any cultural requirements.

With regard to the ITD incentive, Dominican corporate taxpayers are offered a generous incentive when they invest in eligible Dominican film production companies. 100% income tax deductibility of such investments with the possibility to offset their income tax liability up to 25%.  This provision alone is expected to generate a significant funding base (estimated in excess of $100 million per year) for Dominican film productions from the private sector.

Unlike the 25% freely transferable tax credit, the films produced taking advantage of this newly generated pool of funds must adhere to certain cultural requirements (e.g., Spanish language majority, production location in the DR, talent, crew).

Finally, a substantial long-term 100% income tax exemption, for a period of up to 15 years, is granted to investors promoting the development of new industry related infrastructures (studios, movie theaters, etc.), and to distribution and technical service providers that will establish their business in the DR.

Mr. Ellis Perez predicts that that 12 to 15 films could be filmed in the DR in 2012, which would be a leap from the present two to three films a year, as producers seek to make the most of the newly passed General Cinema Law.  DGCINE has allocated a budget of RD $125 million for 2012.

Click here to read the full version of the Film Law and its Regulations.