Congress Approves Law Creating Economic and Tax Incentives for the Promotion of Film and Audiovisual Activities in Peru
On June 11, 2024, Congress approved the Bill creating economic and tax incentives for the promotion of film and audiovisual activities in Peru (hereinafter, the “Bill”). The bill was approved with more than 80 votes in favor and was exempt from a second vote. The executive branch has a maximum of 15 days to review or enact the proposal.
The proposed incentives include:
The possibility for individuals or legal entities to make donations to companies that carry out film or audiovisual projects and obtain a deduction when determining their Income Tax.
Thus, Article 16 of the Bill establishes that up to 20% of the sum of net earned income and foreign-source income may be deducted, or, in the case of legal entities, of third-category gross income. This is a benefit to those who make financial donations to projects recognized by the Ministry of Culture.
The Bill establishes that a partial or total exemption may be applied to the payment of tariffs and other taxes related to the entry and exit of goods into the country. This is provided that the goods are imported for the purpose of being used in the film and audiovisual activities covered by the Bill.
As an investment incentive, the Bill establishes that any legal or natural person covered by the General Income Tax Regime who invests in film or audiovisual projects is entitled to an audiovisual credit, which can be used against advance payments and regularization of income tax and sales tax. The audiovisual credit is equivalent to the income tax rate applied to the investment amount. The National Treasury Directorate of the Ministry of Economy and Finance will issue Audiovisual Production Investment Certificates (CIPA).
This seeks to incentivize the development of audiovisual and film projects in the country.
As always, at Thorne, Echeandía & Lema Abogados, we welcome any questions, comments, or additional clarifications you may have regarding the legal and tax impact of the information contained in this newsletter. If so, please do not hesitate to contact our tax team:
Pilar Santillán Meza
