The Decree establishes a transferable tax credit of up to 30% of production costs incurred in Mexico, subject to per-project limits and an annual aggregate cap of up to MXN 400 million.
On February 16, 2026, the Decree granting a tax incentive for film and audiovisual production (the “Decree”) was published in the Federal Official Gazette. The incentive will remain available until September 30, 2030.
The Decree is intended to encourage film and audiovisual production in Mexico through a transferable tax credit, subject to an annual aggregate cap of MXN 400 million.
The incentive may represent up to 30% of the total cost of a project or production process effectively incurred in Mexico, subject to a limit of MXN 40 million per project or process and per beneficiary taxpayer.
Eligible taxpayers include, among others, individuals taxed under the Business and Professional Activities regime, legal entities under the general corporate regime and the Simplified Trust Regime, as well as foreign residents with a permanent establishment in Mexico carrying out film or audiovisual productions in the country.
Foreign residents without a permanent establishment may also qualify, provided that the production is carried out through an individual or legal entity resident in Mexico that is engaged in these activities and the requirements established by the Technical Committee are satisfied.
The Decree distinguishes between film and audiovisual projects. Film projects include activities carried out in Mexico to develop, produce or complete feature films primarily intended for theatrical exhibition. Audiovisual projects include, among others, series, miniseries, animation and productions involving significant visual effects or post-production work whose principal form of exploitation is not theatrical exhibition.
To qualify for the incentive, taxpayers must satisfy several requirements, including:
• Registration with the Federal Taxpayers Registry and an enabled tax mailbox.
• A valid positive tax compliance opinion.
• Submission of the project or production process in accordance with the Technical Committee’s guidelines.
• Qualifying expenditures in Mexico meeting the applicable minimum thresholds, ranging from MXN 5 million to MXN 40 million depending on the type of project or process.
• At least 70% domestic sourcing.
• Obtaining the corresponding filing and compliance certificates.
The credit will be calculated based on essential expenditures incurred in Mexico during development, pre-production, production, post-production and final delivery, in accordance with the applicable guidelines.
Once determined, the credit may be used in several ways. The beneficiary may transfer all or part of it for consideration to Mexican suppliers directly involved in the production or to certain service providers whose goods or services qualify as eligible expenses.
The remaining balance may also be transferred to other income tax (“ISR”) taxpayers for up to 70% of the total credit, subject to the conditions established in the Decree. Among other requirements, the transfer price may not exceed 85% of the amount transferred, and the acquired credit may not exceed 15% of the recipient’s taxable profit for the immediately preceding fiscal year.
Alternatively, the beneficiary may directly apply the credit against ISR due for the relevant fiscal year or against provisional payments for the same year and, where applicable, against ISR for the following two fiscal years until fully used.
Recipients may apply the credit against ISR due in the fiscal year in which the transfer occurs or against provisional payments for that same year. They may not further transfer the credit to third parties, including through corporate reorganizations.
Amounts received by producers as consideration for transferring the credit will constitute taxable income for ISR purposes. By contrast, application of the incentive itself will not constitute taxable income and will not generate a refund, deduction, offset, additional credit or tax balance in favor of the taxpayer.
The Decree also establishes specific restrictions on eligibility. Among other cases, the incentive will not be available to taxpayers subject to certain tax non-compliance situations under the Federal Tax Code, those with final and enforceable tax liabilities that are not adequately secured, restricted or cancelled digital seal certificates, taxpayers in liquidation, those applying the incentive under Article 189 of the Income Tax Law, or taxpayers involved in certain tax criminal proceedings or determinations.
Failure to comply with the requirements established in the Decree or the applicable guidelines will result in the loss of the incentive, and the corresponding tax must be paid with inflation adjustments and surcharges.
The new framework introduces a relevant tax tool for the financial structuring of film and audiovisual productions in Mexico. Producers, investors, suppliers and potential purchasers of the credit should assess project eligibility, qualifying costs, domestic sourcing requirements and the tax and contractual conditions of any transfer at an early stage.
Von Wobeser y Sierra is available to assess the application of the incentive, its tax structuring and the requirements applicable to film and audiovisual projects.
