After the presentation of the tax reform project in the Chamber, by the Minister of Finance José Antonio Ocampo, there is concern in the audiovisual sector because they might lose the benefits they have had in recent years and that have allowed the sector to grow since 2003 : in article 69 appears the repeal of article 16 of Law 814 of 2013, which is known as the Film Law, and the second paragraph of article 9 of Law 1556 of 2012, known as Filming Law.
What happens then?
In Colombia there are two film laws that promote production in exchange for different economic incentives and tax exemptions, which have been fundamental for the country to have gone from producing between 2 and three films a year to 50 feature films in the last 20 years, and the great production companies and platforms of the world shoot their great projects in the national territory.
The first law is 814 of 2003, which gives a series of tax discounts to national companies that invest in productions, a mechanism that has made possible the exponential growth of short and feature films in the country, the same ones that are recognized today at film festivals. most important cinema in the world and in awards such as the Oscars.
This initiative also allowed the creation of the Film Development Fund that finances films with the percentage of profits collected by movie theaters, among other items.
The other law is 1556 of 2012, also known as the “Filming Law” or the “Colombia Filming Law”. It was enacted in 2012 with the aim of promoting the national territory as a setting for the filming of cinematographic works and has been essential for the world’s great producers to come and shoot in Colombia, not only taking advantage of its natural locations, the price of the hand of work, technical experience, but in tax consideration that can be 40% of the value of the investment.
tax reform
The implementation of these regulations, which among other things has made it easier for 44 international productions to have been made in the country since 2013, is at risk with the tax reform project. Although the risks are not new, they were already in the draft that Iván Duque presented and it fell at the time, says Andrés Jaramillo, lawyer and co-founder of the National Audiovisual Assembly. They only returned in the one presented this Monday by the government of Gustavo Petro. What happens is that profits from film production were maintained in that one.
What is in the project?
The repeal of article 16 of Law 814 of 2013, which states: “Tax benefits for donations or investments in film production… Income taxpayers who make investments or make donations to film projects of Colombian production or co-production feature film or short film approved by the Ministry of Culture through the Directorate of Cinematography, will have the right to deduct from their income for the taxable period in which the investment or donation is made and regardless of their income-producing activity, one hundred twenty-five percent (125%) of the real value invested or donated”.
Also the repeal of the second paragraph of article 9 of Law 1556 of 2012, known as the Filming Law. And it appears like this: “Consideration. The companies that produce cinematographic works, wholly or partially shot within Colombian territory, that enter into Colombia Filming Contracts, will have a consideration equivalent to forty percent (40%) of the value of the expenses incurred in the country for cinematographic services contracted with Colombian companies of cinematographic services and twenty percent (20%) of the value of the expenses in hotels, food and transportation, as long as the conditions established in the resource allocation manual are met.
In conclusion, the tax discounts of Law 814 of cinema are repealed, as well as the benefits of foreign investment.
The concern? Jaramillo says that this foreign investment that came to the country on account of tax benefits was the one that revolutionized the industry in the country. “Without that, the sector goes bankrupt, thousands of jobs are lost and the industry would return to the indicators it had before 2002.”
In 2021, some former Directors of Cinematography of the Ministry of Culture sent a letter in defense of national cinema, which would apply for this moment: “The reform repeals articles that in these regulations stimulate international filming in Colombia and those that promote the financing of the Fund for Film Development (FDC), a parafiscal fund that feeds fiction, animation and documentaries with the creation of feature films and hundreds of short films, supports national festivals and the participation of our projects and films in international markets, a fund that contributes to the work of our audiovisual archives and that provides training and scholarships to filmmakers of all ages and from all regions of the country”.
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Between 2022 and 2026, spending or investment in the country by audiovisual projects that hire Colombian audiovisual and logistics services is expected to reach $5.1 billion, according to a report prepared by Proimágenes.
Jaramillo says that the work of the audiovisual sector is to make the Government understand the benefits that these two laws bring to the cinema and to the country in general, on issues such as job creation and tourism promotion, and alerts regarding the serious implications that the repeal would bring. of the tax discounts of laws 815 and 1556.
