United States

Film & TV Tax Guide

Sep 06, 2016
From the KPMG TaxWatch

A resource for executives involved with the commercial side of film and TV production

Today, motion picture and television production happens all around the world as studio and production executives pursue authentic and aesthetic locations that are also cost effective. Governments recognize that tax revenues resulting from film and TV production go beyond the immediate production activity, such as hiring local crews and talent, to other activities that support local infrastructure investment on an ongoing basis such as building and operating production facilities.

The result: Heightened competition among governments to attract this business to their jurisdiction, often through tax credits and incentives, and tax-advantaged financing alternatives.

Navigating the potential tax implications of a project can, therefore, become an important element for film and TV producers and other industry executives to consider when making location decisions and conducting cross-border business. These executives are also facing a growing set of tax considerations regarding digital assets and distribution, including classification and sourcing of income and determination of appropriate arm’s-length returns for content owners and content distributors.

The OECD’s Base Erosion and Profit Shifting (BEPS) initiative, which is taking a fresh look at the digital economy and ownership of intellectual property (IP), results in industry executives needing to evaluate how their cross-border business is organized. Does their foreign company structure need to change to reflect shifting IP ownership requirements?  And as a byproduct, are governments offering in-county IP development research and development credits and incentives that could affect these decisions?

Film Financing and Television Programming: A Taxation Guide (www.kpmg.com/us/filmtax) from KPMG LLP is recognized as a valued reference tool for evaluating these tax considerations. Comprised of country-specific chapters, the guide provides a description of commonly used financing structures in film and television, as well as their potential commercial and tax implications for the parties involved.

Each chapter includes the following sections, allowing country-by-country comparisons of the tax landscape: general description of a country’s film and TV industry, at-a-glance tables of key tax facts, commonly used financing structures, tax and financial incentives, overviews of corporate and personal tax rules, and digital media considerations.

Need the withholding tax rates between specific countries?

The guide also includes a Film & TV Withholding Tax Calculator. Select the paying country, the receiving country, and the payment type (royalties, dividend, and interest) and the applicable tax rate (with explanatory notes where needed) is provided.

Authors:

Anthony R. Castellanos

Partner, Media & Entertainment Industry Leader for Tax, KPMG LLP

Benson R. Berro

Partner, Media & Entertainment Industry Deputy Leader for Tax, KPMG LLP

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The above information is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.