Guidelines for Applying the New Tax Incentive for Film and Audiovisual Production in Mexico

On March 30, 2026, the Agreement issuing the guidelines for the application of the Decree granting a tax incentive for film and audiovisual production in Mexico (the “Guidelines”) was published in the Official Gazette of the Federation. With the publication of the Guidelines, the Technical Committee completes the regulatory framework governing the incentive's operation, providing greater legal certainty for producers, studios, and platforms to structure their projects with full confidence.

Context and Scope of the New Tax Incentive The new tax incentive for film and audiovisual production in Mexico represents a structural shift compared to existing tax benefits, moving toward a hybrid model that combines elements of a transferable tax credit with indirect monetization mechanisms. Unlike traditional schemes, such as EFICINE, this benefit does not materialize at the initial investment stage but is instead conditional upon:

• The effective execution of the project.
• Compliance with technical, cultural, and tax criteria.
• Ex-post validation by the Technical Committee.

In this regard, the incentive should be treated financially as a possible contingent asset, subject to regulatory validation.

Structure of the Incentive The operating framework contemplates two key regulatory milestones:

Certificate of Application Filing (ex-ante phase) This certificate confirms the project:

• Was formally submitted.
• Meets minimum requirements.
• Is eligible for evaluation.

At this stage, no economic right arises, but it enables execution under the expectation of the incentive.

Certificate of Compliance (ex-post phase) This phase represents the critical moment of the scheme, as the incentive has legally materialized at this stage, by:

• Validating that the project was executed in accordance with what was authorized.
• Incorporating a report from a certified public accountant registered with the SAT.
• Enabling the direct application or transfer of the tax credit.

Key Aspects to Access the Incentive Applicant Requirements: * Positive tax compliance opinion from the SAT (Article 32-D of the Federal Tax Code).

• Tax ID (RFC), official identification, and notarized powers of attorney.
• Active e-signature (e.firma) and enabled tax mailbox (buzón tributario).
• For foreign individuals or entities: agreement with a Mexican producer and tax information from the country of residence. The incentive framework requires maintaining continuous tax compliance throughout the project's life.

Project Requirements: The project file must include a written submission containing:

• Type and name of the project.
• Amount to be credited against the applicable income tax (ISR).
• Indication of whether the tax incentive will be transferred for consideration and the list of domestic suppliers or ISR taxpayers.
• Detailed budget with expenditure timeline.
• Script, creative proposal, and visual materials.
• Production plan and monthly critical path.
• Identification of direct and indirect qualifying expenses.
• Contracts and/or letters of intent with suppliers (at least 50% committed from the outset).

Structural Requirements: * Expenditure in Mexico. Only expenses incurred in the national territory that are deductible for income tax purposes are eligible.

• Domestic supply chain. At least 70% of suppliers must be tax residents in Mexico (eligibility criterion).
• Technical validation. Through a report issued by a certified public accountant registered with the SAT certifying total cost, qualifying expenses, and transfer structure. The CPA audit is a core element of the validation mechanism, serving as the primary means through which the right to the incentive is validated.

Eligibility Criteria The Technical Committee will evaluate five aspects that will determine the applicable percentage of the incentive:

1. Domestic supply chain. National participation equal to or greater than 70%.
2. Budget. Proper classification of qualifying expenses: direct and indirect.
3. Territorial. A critical criterion: equal to or greater than 70% of filming days or qualifying expenditure executed outside metropolitan areas.
4. Cultural. Content with verifiable Mexican cultural value.
5. Training. Capacity building and knowledge transfer in favor of national talent. Projects meeting territorial, cultural, and training criteria may receive the maximum incentive percentage.

Process Stages Stage 1 — Application (pre-production/production) Submission of the project file through the Single Window. This represents a comprehensive project structuring process. 

Stage 2 — Validation 10 business days for initial review and 5 days for correction of observations. 

Stage 3 — Technical Evaluation 5 business days for submission to IMCINE and 15 days for the Technical Committee session. 

Stage 4 — Resolution Notification within 5 business days. No response implies a deemed denial (negativa ficta). Result: Certificate of Application Filing. 

Stage 5 — Project Execution Execution in accordance with the approved file with strict control of tax traceability. 

Stage 6 — Closing and Certification Completion notice and delivery of final materials within 30 days after completion. 

Stage 7 — Compliance Request CPA audit report and documentary evidence of qualifying expenses. 

Stage 8 — Final Resolution Same timeline as validation stages. Result: Certificate of Compliance. 

Stage 9 — Monetization of the Incentive * Direct application against income tax.

• Transfer of the tax credit: to project suppliers or up to 70% to unrelated taxpayers, subject to a maximum discount of 15% on the nominal value. Monetization must occur within the same fiscal year.

Key Risks * Tax risk. Revocation triggers recalculation of income tax with surcharges and inflation adjustments.

• Cash flow risk. The benefit is ex-post, requiring bridge financing as the incentive is not part of the initial production budget.
• Eligibility risk. Failure to meet the 70% domestic supplier requirement or lack of documentation may eliminate the benefit.
• Operational risk. Deviations between approved budget and actual expenditure may affect the final incentive amount.

Conclusion The new tax incentive for film and audiovisual production in Mexico operates as a financial instrument that rewards local expenditure and cultural impact. Success is defined at the application stage: a solid submission that anticipates the final audit and reflects realistic execution is key. 

At Baker Tilly Mexico, our specialized entertainment industry team supports project eligibility evaluation, efficient tax structuring, and comprehensive guidance throughout the authorization, execution, and monetization phases. We are monitoring the implementation of the Guidelines to assist clients in maximizing the benefits of this new incentive within a sustainable compliance framework.