SIMPLE EXPLANATION OF HOW THE VAT 0% INCENTIVE FOR FOREIGN PRODUCTIONS WORK.
According to the law, all goods and sevices used in a production destined to be exported and projected in movie theatres or television are suceptible to the return of the VAT:
Including but not limited to wardrobe, make-up, location fees, props, set decoration, crew and equpement transportation services to/from location ( air,ground,sea) accommodation, film equipment (camera, lighting grip, etc.) catering (specialized in film or restaurants), animal rental, etc. The above goods and services are considered for export when provided by Mexican residents to non-Mexican residents living abroad.
1.-Foreign in investment (not residing in Mexico)
2.- Mexican company – investment administrator- production company It also means, among other assumptions, that the services services referred to the fraction mentioned, take advantage abroad when they are hired and paid by a foreign resident with no place in the country, if pad by check or transfer funds to accounts or brokerage firms and playing accounts come from financial institutions located abroad
1.-Contract signed between investor and administrator specifying approximate duration of the project, total amount of investment, and service fee.
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EXTRACT FROM THE VAT REGULATION OF THE UNITED MEXICAN STATES.
Article 58. For the effects of Article 29, Fraction IV of the Law, the abroad exploitation of services rendered by individuals or corporations residing in the country include both those rendered in Mexico and those rendered abroad. Likewise, it is understood among other suppositions, that the services the aforementioned fraction refers to, are exploited abroad when they are hired and paid by a resident in a foreign country without any establishment in the country, provided they are paid by means of a nominative check or money transfer to the accounts of the service provider at credit institutions or stock exchange offices and the payment comes from bank accounts located in a foreign country.