P.R. Laws tit. 23, § 11001a
Whenever used as proper nouns, the following words and terms, as used in this chapter, shall have the meaning stated hereinbelow:
(a) Puerto Rican actors and actresses.— Onscreen talent deemed to be: an individual who is a Puerto Rico resident, as defined in the Puerto Rico Internal Revenue Code, a nonresident individual born in Puerto Rico, or a nonresident individual whose mother or father is Puerto Rican, or who is of Puerto Rican descent up to the second degree of consanguinity inclusive (grandchildren).
(b) Legislative Assembly.— Means the House of Representatives and the Senate of the Commonwealth of Puerto Rico, acting jointly.
(c) Auditor.— An independent certified public accountant authorized to practice said profession in Puerto Rico, contracted by the grantee to carry out the functions contemplated under this chapter.
(d) Code.— Sections 30011 et seq. of Title 13, known as the “Puerto Rico Internal Revenue Code of 2011”, or any subsequent similar law that substitutes it.
(e) Grantee.— A person that has received a grant under the provisions of this chapter.
(f) Conflict of interest.— Any situation where a direct or indirect interest of a person or the relatives thereof, in accordance with the Puerto Rico Government Ethics Act of 2011, §§ 1854 et seq. of Title 3, is or may be reasonably in disagreement with the interests of the Corporation or the public interest with respect to one or more projects to be evaluated.
(g) Motion Picture Corporation.— The Puerto Rico Motion Picture Arts, Sciences, and Industry Development Corporation created by §§ 592 et seq. of this title.
(h) Grant.— The concession of authority by the Secretary of Economic Development and Commerce, pursuant to this chapter, §§ 592 et seq. of this title, and the Motion Picture Corporation Act, to allow a person engaged in film projects or infrastructure projects or a studio operator or large-scale studio operator to avail himself of the incentives set forth in this chapter, provided that the requirements of this chapter are met. “Grant” shall have the same meaning as “incentives grant”, “tax exemption”, “tax incentives”, or merely “incentives”, “exemption”, “grant”, or “license”, which can be used indiscriminately as may be convenient for the purpose of illustrating what is provided in the corresponding text.
(i) Studio.— A comprehensive purpose-built, high-capacity film and television production studio, developed and operated anywhere in Puerto Rico, suitable for the purposes of housing soundstages and exterior sets, including facilities for set construction and design, production offices, and production services departments catering to the production community and such other built-in necessary amenities or facilities, as determined by the Secretary of Economic Development and Commerce through regulation, circular letter or administrative determination, with a budget equal to or greater than fifty million dollars ($50,000,000), as certified by the auditor.
(j) Large-scale studio.— A comprehensive purpose-built, high-capacity film and television production studio, developed and operated within a film development zone, suitable for the purposes of housing soundstages and exterior sets, including facilities for set construction and design, production offices, and production services departments catering to the production community and such other built-in necessary amenities or facilities, as determined by the Secretary of Economic Development and Commerce through regulations, circular letter, or administrative determination, with a budget equal to or greater than one hundred million dollars ($100,000,000), as certified by the auditor.
(k) Bond.— An irrevocable standby letter of credit issued by a financial institution duly authorized to do business in Puerto Rico, the assurance of a surety or insurance company, or a surety from a creditworthy person, in each case acceptable to the Secretary of the Treasury, to the effect that a film project or infrastructure project shall be completed within the corresponding proposed terms and parameters. In the case of film projects, the term “bond” shall include a “completion bond”.
(l) Fund or Motion Picture Fund.— The Puerto Rico Motion Picture Arts, Sciences, and Industry Development Corporation Fund, created by virtue of §§ 592 et seq. of this title, known as the “Puerto Rico Motion Picture Arts, Sciences, and Industry Development Corporation Act”.
(m) Principal photography.— The phase of production during which a film project is actually filmed. The term shall not include the preproduction or postproduction of a film project.
(n) Production expenditures.— The development, preproduction, production, and postproduction expenditures directly incurred in the production of a film project. The expenditures related to the development of a film project shall only be included when not less than fifty percent (50%) of the principal photography of the film project takes place in Puerto Rico. The expenditures related to the preproduction, production, and postproduction shall not be required to meet the aforementioned fifty percent (50%) principal photography requirement to be considered production expenditures.
(o) Puerto Rico production expenditures.— The payments made to Puerto Rico residents, and/or qualified nonresidents for services physically rendered in Puerto Rico that are directly attributable to the development, preproduction, production, and postproduction of a film project. The expenditures attributable to the development of a film project shall only be included when not less than fifty percent (50%) of the principal photography of a film project takes place in Puerto Rico. The expenditures attributable to preproduction, production, and postproduction shall not be required to meet the aforementioned fifty percent (50%) principal photography requirement to be considered Puerto Rico production expenditures. In order to constitute Puerto Rico production expenditures, the payments received by Puerto Rico residents and qualified nonresidents shall be subject to income taxes in Puerto Rico, as provided in this chapter, whether directly or through a professional services corporation, cooperative, or other legal entity. The Puerto Rico production expenditures include payments related to the development, preproduction, production, and postproduction of a film project including, but not limited to the following:
(1) Wages, fringe benefits, per diems or fees for talent, management, or labor provided to a person that is a Puerto Rico resident or qualified nonresident. However, per diems of a Puerto Rico nonresident or qualified nonresident may be included in the definition of Puerto Rico production expenditures at the discretion of the Secretary of Development;
(2) interest, charges, and fees paid to persons included in § 30137(f)(4) of Title 13; and/or
(3) any of the following goods or services provided by a supplier that is a Puerto Rico resident:
(A) The story and screenplay to be used for a film project;
(B) set construction and operations, wardrobe, accessories, and related services;
(C) photography, sound synchronization, lighting, and related services;
(D) editing and related services;
(E) rental of facilities and equipment;
(F) leasing of vehicles, including the chartering of aircraft or watercraft, provided that such aircraft or watercraft is registered and home ported in Puerto Rico, and such leasing is limited to travel within Puerto Rico, its airspace, and territorial waters;
(G) food and lodging;
(H) airfare, if purchased through a Puerto Rico-based travel agency or travel company for travel to and from Puerto Rico or within Puerto Rico, that is directly attributable to the film project;
(I) insurance coverage or bonding; provided, that it is purchased through an insurance producer authorized to do business in Puerto Rico; and
(J) other costs directly attributable to the film project in accordance with the generally accepted entertainment industry practice, as determined by the Secretary of Development through regulations, circular letter, or administrative determination.
(4) The following shall be excluded from the Puerto Rico production expenditures definition:
(A) Those items paid to Puerto Rico residents with the money obtained through any subsidy, gift, or fund appropriation from the Government of the Commonwealth of Puerto Rico. Those items paid to Puerto Rico residents with money obtained through contributions made to a film project on account of sponsored advertisement, brand integration or product placement, or media buy, or that because of their nature and terms are refundable, such as loans or investments, including contributions by the Puerto Rico Motion Picture Fund created under the Motion Picture Corporation Act may be included in the definition of Puerto Rico production expenditures at the discretion of the Secretary of Development.
(B) The cost of goods acquired or leased by Puerto Rico resident suppliers outside of Puerto Rico for resale to a grantee, when these fail to comply with the rules prescribed by the Secretary of Development through regulations and/or circular letter, and when, in the judgment of the auditor there is no economic substance in the transaction; and
(C) Those items paid to Puerto Rico resident entities mainly for the services rendered by natural persons other than Puerto Rico residents, except for entities rendering line[sic] qualified nonresident services.
(p) Governor.— The Governor of the Commonwealth of Puerto Rico.
(q) Government.— The Government of the Commonwealth of Puerto Rico including all of its municipalities, instrumentalities, political subdivisions, agencies, and public and quasi-public corporations.
(r) Screenplay.— A document that describes the motion picture production, the scenes, action, dialogues, setting, events, and shooting directions of a fiction project.
(s) Screenwriter.— A natural person who creates the original screenplay, the dialogues, or an adaptation from another source on which the film project is based.
(t) Board of Directors.— The Board of the Puerto Rico Motion Picture Arts, Sciences, and Industry Development Corporation.
(u) Act.— The Puerto Rico Film Industry Economic Incentives Act.
Motion Picture Corporation Act.—Sections 592 et seq. of this title, known as the “Puerto Rico Motion Picture Arts, Sciences, and Industry Development Corporation Act”.
(w) Qualified nonresident.— Producer, director, writer, onscreen talent (except for background actors, also known as extras), including stuntmen, known as above-the-line; any technical or creative staff behind the cameras, known as below-the-line; and any other similar individual who, according to the generally accepted practice in the entertainment industry, is deemed to be above-the-line or below-the-line, as determined by the Secretary of Development, other than a Puerto Rico resident.
(x) Large-scale studio operator.— A person engaged in the administration and operation of a large-scale studio.
(y) Studio operator.— A person engaged in the administration and operation of a studio.
(z) Person.— Any natural person, corporation, partnership, professional service corporation, association, trust, limited liability company, cooperative, or any other entity or organization, including the Government of the Commonwealth of Puerto Rico.
(aa) Producer.— A private entrepreneur who owns the motion picture copyrights and is responsible for the production and marketing of the film project.
(bb) Infrastructure project.— The development or substantial expansion in Puerto Rico of studios, large-scale studios, laboratories, facilities for postproduction, animation, and special effects, facilities for the international transmission of television images or other media, or other permanent facilities to carry out film projects (regardless of whether said projects avail themselves of the provisions of this chapter) whose hard costs budget, as certified by the auditor, exceeds one million dollars ($1,000,000).
(cc) Film project.— As defined in § 11003(b) of this title.
(dd) Puerto Rico resident.— An individual who meets the requirements set forth in § 30041(a)(30) of Title 13 and/or a corporation, partnership, limited liability company, cooperative, or other juridical person organized under the laws of the Government of the Commonwealth of Puerto Rico, or engaged in a trade or business in Puerto Rico pursuant to the provisions of the Code, which must derive not less than eighty percent (80%) of its gross income from sources within Puerto Rico, using the rules prescribed in § 30114 of Title 13 related to sources of income.
(ee) Secretary of Development.— The Secretary of the Department of Economic Development and Commerce of the Government of the Commonwealth of Puerto Rico.
(ff) Secretary of the Treasury.— The Secretary of the Department of the Treasury of the Government of the Commonwealth of Puerto Rico.
(gg) Transfer.— A lease, sale, exchange, transfer, assignment, or conveyance in any manner of real or personal property, as the case may be.
(hh) Film development zones.— The geographic areas described in § 11005 of this title.”
History —Mar. 4, 2011, No. 27, § 2.2; July 13, 2012, No. 140, § 1; Dec. 21, 2012, No. 304, § 1; May 18, 2015, No. 69, § 1.