The Portuguese tax incentive for film production, provided for in the State Budget Act of 2016, has been established by decree-law, approved by the Council of Ministers on 15 December 2016.

The scheme is fully operational as of early March 2017.

The incentive is a refundable tax credit (corporate income tax), very similar to schemes such as the French Crédit d'impôt and TRIP, or the British Film Tax Rebate.
The incentive applies to cinematographic works (feature lenghth) of every type (fiction, documentary or animation), with a minimum production expenditure in Portugal of 1 million euros.

The scheme covers national productions, official co-productions, non-official co-productions and foreign films (line production / services).

It offers a rebate of 20% to 25% on eligible expenditure, depending on the characteristics of the project, with 25% for films in Portuguese language and at least 24% for official co-productions. Cap: € 4 000 000 rebate per project.

Eligibility and rate of rebate are determined against a test of cultural and production characteristics of each project. This “cultural test” is largely similar to other EU-compliant tax schemes, with premium points (increasing the rebate %) sensitive to cultural value, gender equality and film excellence.

Applications are managed by the Portuguese national film agency (ICA – Instituto do Cinema e Audiovisual), which issues a provisional recognition of the project and its final recognition, after completion of the project and audit report (compliance and certification of accounts). The rebate amount is set off by the production company against its possible tax liability, and the remaining amount of credit is refunded by the Tax administration.