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December 16, 2021

Costa Rica enacts law to promote investment in and development of international film productions in Costa Rica

The law includes tax incentives for beneficiaries that carry out film or audiovisual investment projects in Costa Rica. Those incentives include various tax exemptions and a value-added tax refund for local purchases of goods and services directly related to the project.

On 13 December 2021, Costa Rica enacted the Film Investment Attraction Law, which aims to promote investment in and development of international film productions, co-productions and activities in Costa Rica.

The law establishes tax incentives for taxpayers that carry out film or audiovisual investment projects, duly approved by the Costa Rican Foreign Trade Promoter (Procomer). The taxpayers must be natural or legal persons not domiciled in Costa Rica that are either (1) producers or (2) co-producers, with national legal entities or individuals.

The tax incentives are:

  • An exemption from the income tax on dependent (i.e., as an employee) or independent personal (i.e., independent contractor) work and withholding tax for remittances abroad for foreign personnel (i.e., actors, actresses, directors, producers, technical personnel and all those necessary for the development of the project), provided the payments are not made with funds from a Costa Rican source
  • The suspension of all import taxes on the temporary importation of equipment and spare parts for film and audiovisual production and an exemption from making the guarantee deposit, as long as the merchandise is clearly identified and re-exported or imported within 15 days of the end of the term granted by Procomer to the film or audiovisual project
  • An exemption from all taxes, levies, fees or contributions on imports of tools, clothing, makeup, scenery and technical material that are required to carry out the project and an exemption from taxes and other charges on the entry of luggage carrying the materials, equipment or clothing for the project
  • A refund of 90% of the total value-added tax paid on local purchases of goods and services in Costa Rica directly related to the project, if the amount of the purchases exceeds US$500,000

The Law went into effect on 13 December 2021, and the Executive Branch must issue the corresponding regulations within five months.


For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.A., San José, Costa Rica

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young Abogados, Latin America Business Center, Madrid

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


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