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ANCINE The Brazilian Film Agency

ANCINE, the Brazilian Film Agency, regulates, supports, and monitors the film industry in Brazil. It operates under the supervision of the Ministry of Culture and works alongside the Audiovisual Secretariat to develop the AV sector. ANCINE provides export programs like BTVP and Cinema do Brasil to promote international partnerships and co-productions. They also support over 20 film commissions in Brazil and foster international cooperation in the audiovisual sector, including international co-productions.

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ANCINE The Brazilian Film Agency

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  1. ANCINE The Brazilian Film Agency

  2. ANCINE ANCINE, the Brazilian Film Agency, is a financially and administratively independent government agency, operating under the supervision of the Brazilian Ministry of Culture. It was established in September, 2001 to contribute to the regulation of, support to, and monitoring of the film industry in Brazil.

  3. The Audiovisual Secretariat Together with ANCINE, the Audiovisual Secretariat is also part of the institutional framework which focuses on the development of the Brazilian AV sector. The Audiovisual Secretariat deals mostly with cultural issues, such as those relating to education and film heritage.

  4. Export Programs Brazilian TV Producers (BTVP): BTVP is an audiovisual content export program created by the Brazilian Independent TV Producers Association in partnership with Apex-Brasil (Brazilian Trade and Investment Promotion Agency) and our Ministry of Culture. It promotes the independent audiovisual production abroad, enabling partnerships between Brazilian and foreign companies. Their main goals are to promote new co-production opportunities and develop international partnerships for TV and new media producers. BTVP is present in a variety of international events, such as MIPTVP, MIPCOM, Realscreen, Kidscreeen, BANFF, giving support to the participation of Brazilian producers.

  5. Export Programs Cinema do Brasil: Cinema do Brasil is another export program established by Apex-Brasil and the Audiovisual Secretariat. Its goal is to increase the participation of the Brazilian audiovisual sector in the international market, offering strategic and logistical support to approximately 140 associated companies so that they can make co-productions and open markets for the distribution of their productions, thereby aggregating value to the image of the Brazilian film industry overseas. It is present in key international film festivals.

  6. Film Commissions We have more than 20 film commissions in Brazil. They are local initiatives – funded by some states/cities in Brazil.

  7. ANCINE - International Cooperation Our commitment to diversity is reflected in our interest in fostering international cooperation between Brazil and other countries in the audiovisual sector.

  8. ANCINE - International Cooperation • Whyis international co-productionimportanttous? • It’sthemost natural and efficientwayto- • enableusto pool artistic and technical expertise; • enrich bilateral/multilateral exchangestowardssubstantial cultural benefits; • contributetoactualeconomicgrowth in the countries involved in theco-production; • providebroaderaccesstopublicorsubsidisedfundsto Brazilian and foreignfilmmakers (in Brazil and abroad); • increasesales in the international space etc.

  9. International Co-productions: framework According to the Brazilian legislation, international co-productions involving Brazil can be considered “official”, and therefore have national treatment in Brazil, in two different situations: a) without a treaty; b) under an international co-production treaty.

  10. International Co-productions: non-treaty co-productions • Eligibility criteria for non-treaty co-productions: •  a) the Brazilian co-production company shall own at least 40% • of the rights to the film; • 2/3 of the cast and crew must be comprised of Brazilian citizens or foreign citizens with a minimum residence of 3 years in Brazil. • Note: In order to fulfill the “cast and crew requirement”, we check the following positions: • author of thestory; scriptwriter; directororanimationdirector; director of photography (includingthose of 3D animation); artdirector (includingthose of animation films); audiotechnician; image editor; sound designer ormusiccomposer; mainactor(s) oractress(es), ormaindubbers in the case of animation films; executiveproducer; sound editor orsound designer; soundmixer.

  11. International Co-productions: treaty co-productions The requirements set out in the agreement concerned are to be met. We have co-production treaties with- Argentina, Canada, Chile, France, India, Italy, Germany, Spain, Portugal and Venezuela. We are also signatory to the Latin American Film Co-production Agreement.

  12. International Co-productions: treaty co-productions • Agreementssigned, but not yet in force: • Brazil - Italy; • Brazil - Israel; • Brazil - United Kingdom. • Agreementsundernegotiation: • Brazil - South Africa; • Brazil - New Zealand; • Brazil - French-speakingBelgium; • Brazil - Russia.

  13. International Co-productions: treaty co-productions • Remittancesabroad • Note: • The Brazilian legislation does not prohibit remittances abroad. • Remittances abroad are subject to taxation imposed by the Federal Government. • However, film/audiovisual production companies can include those taxes in the budget of a film (or audiovisual work) if they need to send remittances abroad, and they are allowed to use Brazilian public resources to cover the expenses they have with this kind of taxation provided that the budget is approved by Ancine beforehand.

  14. ANCINE’s co-production financial support programs: • With Portugal, Argentina, Uruguay (co-production programs) • And Italy (development of co-productions) • The funds awarded by these programs are all non-refundable. • A selection process takes place in each of the two countries concerned.

  15. ANCINE’s co-production financial support programs: • Example of a co-production financial support program: • Example 1: Brazil-Portugal • Annual Amount Available: US$ 600.000 • Amount per project: US$ 150.000,00 • Brazil awards 2 projects with a major Portuguese participation • - Portugal awards 2 projects with a major Brazilian participation

  16. ANCINE’s co-production financial support programs: Example 2: Brazil - Italy - Aimed at the development of co-production projects (fiction, animation and documentary) • Two types of financial support are granted: • Line A: two projects by beginning authors are awarded 25,000 Euros each (in each country) • Line B: one project by a non-beginning author is awarded 30,000 Euros in each country. • Note: The authors awarded in Brazil take part in a training event in Italy and those awarded in Italy come to Brazil.

  17. Main forms of government support to the audiovisual industry: • In Brazil, there are different forms of government support for the Brazilian film industry. • The main forms of financial support are: •  - INDIRECT SUPPORT through tax incentives; • - DIRECT SUPPORT through the funding of ANCINE itself as well as local and federal funds (most important example: the Audiovisual Sector Fund - FSA).

  18. Main forms of government support to the audiovisual industry: Note: Since official international co-productions have national treatment in their co-producers’ countries, all Brazilian government financial support sources are available for official co-productions involving Brazil.

  19. Government support: Tax Incentives • Private and State-owned companies established in Brazil, as well as individual taxpayers, are allowed to invest part of their income tax obligations in the production of Brazilian films. • - Tax incentives can also be invested in independent TV productions; film development and distribution; technical infra-structure; art theaters; and film festivals

  20. Government support: Tax Incentives • To qualify for tax incentives, the companies responsible for the projects must apply to ANCINE on each specific project. • If the application is approved, ANCINE will follow up the project and ensure that the money allocated through tax incentives is spent properly.

  21. Government support: Tax Incentives • Main mechanisms: • Federal Law 8685 (established in 1993), the “Audiovisual Law”: Articles 1, 1A, 3 and 3A • b) MP 2228-1 (established in 2001), Article 39 • Federal Law 8685, Article 1: • Taxpayers can acquire equity in independent Brazilian films through the stock exchange. Corporations that make such an investment are entitled to a tax deduction – equivalent to the capital subscribed – of up to 3%, of their income tax due. This mechanism offers other advantages for corporations. First, the total amount invested can be deducted from taxable income as a trading expense; second, having the company logo displayedbeforeeachscreening of thefilm helps topromotethecorporateimage. • Projects which can benefit from this mechanism include production of features, medium-length films and shorts, as well as distribution, exhibition and technical infra-structure projects.

  22. Government support: Tax Incentives • Main mechanisms: • Federal Law 8685 (established in 1993), the “Audiovisual Law”: Articles 1, 1A, 3 and 3A • b) MP 2228-1 (established in 2001), Article 39 • Federal Law 8685, Article 1A: • Under this Article, corporations are entitled to deduct up to 4% from their income tax - and individuals, up to 6% - on the condition that the said deduction be invested in the sponsorship of independent Brazilian film productions. However, under this mechanism, corporations are not entitled to any profits of the film. • Once a projecthasreceivedapproval for funding, it is eligible to allocate up to R$ 4 million, if it benefits from either or both of the mechanisms described above.

  23. Government support: Tax Incentives • Main mechanisms: • Federal Law 8685 (established in 1993), the “Audiovisual Law”: Articles 1, 1A, 3 and 3A • b) MP 2228-1 (established in 2001), Article 39 • Federal Law 8685, Article 3: • According to Brazilian legislation, remittances abroad of profits from the exploitation of foreign audiovisual works in Brazil are subject to tax at a rate of 25%. However, under Article 3, these taxpayers can get a 70% tax deduction, provided that these resources are invested in the development of independent Brazilian feature films, or in the co-production of independent Brazilian films, TV films or miniseries. • This mechanism has generated important partnerships between Brazilian production companies and the world’s leading film distribution companies.

  24. Government support: Tax Incentives • Main mechanisms: • Federal Law 8685 (established in 1993), the “Audiovisual Law”: Articles 1, 1A, 3 and 3A • b) MP 2228-1 (established in 2001), Article 39 • Federal Law 8685, Article 3A: • This mechanism benefits television broadcasters, including subscription television programmers, who can get a 70% deduction on tax owed on remittances abroad of profits from the broadcasting or narrowcasting of audiovisual works and events in Brazil, provided that they invest an equivalent amount in the development of independent Brazilian feature films or in the co-production of independent Brazilian films and videos, documentaries, TV films and miniseries.

  25. Government support: Tax Incentives • Main mechanisms: • Federal Law 8685 (established in 1993), the “Audiovisual Law”: Articles 1, 1A, 3 and 3A • b) MP 2228-1 (established in 2001), Article 39 • MP 2228-1, Article 39: • Under Article 39, international subscription television programmers are exempt from paying the 11% CONDECINE (Contribution to the Development of a National Film Industry) tax on remittances abroad of profits stemming from the exploitation of audiovisual works, provided that they invest an amount equivalent to 3% of the remittance value in the production of independent Brazilian films and videos of any length and in the co-production of independent Brazilian films, videos, TV films, miniseries and educational and cultural television programs.

  26. Government support: Resources allocated through tax incentives to films released

  27. Government support: The Audiovisual Sector Fund (FSA) FSA is a federal fund, aimed at developing the Brazilian audiovisual industry. It was created in 2006, by Federal Law 11437/2006, Art. 1, and restructured in 2013.

  28. Government support: The Audiovisual Sector Fund (FSA) • FSA’s resources come mainly from the “Contribution to the Development of a National Film Industry” (CONDECINE), a tax applied to: • the broadcasting, production, licensing and distribution of film and video works for commercial purposes; • service providers that distribute audiovisual content, such as telecommunications companies and pay-tv operators.

  29. Government support: The Audiovisual Sector Fund (FSA) • FSA nurturesallsegments of the audiovisual industrythrough • threeprograms and differentlines of actions. • Programs: • PRODECINE: • Dedicatedtosupportingthedevelopment of Brazilian film • (6 lines of action) • 2) PRODAV: • Dedicatedtosupportingthedevelopment of the Brazilian audiovisual sector (8 lines of action) • 3) A MovieTheatreNearYou: Dedicatedtosupportingthedevelopmentofinfrastructure(5 lines of action)

  30. Government support: The Audiovisual Sector Fund (FSA) PRODECINE LINE 1: Featurefilmproduction LINE 2: Featurefilmproduction (projectsappliedby a Brazilian distributor) LINE 3: Exploitation of feature films LINE 4: Supplementaryaidtofeaturefilmproduction LINE 5: Featurefilmprojectscombininganinnovativenarrativeform and artisticrelevance Line 6: Co-productionwithlatin-american countries

  31. Government support: The Audiovisual Sector Fund (FSA) PRODAV LINE 1: Production of independent audiovisual works for television LINE 2: Production of independent audiovisual works for television (projectsappliedby Open orPay TV programmers) LINE 3: Developmet of portfolios of projectsbygroups of creative workprofessionals LINE 4: Developmentlaboratories LINE 5: Project development LINE 6: Automatic financial support LINE 7: Quality incentive program LINE 8: Contentproduction for public TVs

  32. Government support: The Audiovisual Sector Fund (FSA) A MovieTheatreNearYou LINE 1: Opening of new movietheaters LINE 2: Opening of movietheaters in townsorcitieswith more than 20, 000 and lessthan 100,000 inhabitants, where no cinemas are available LINE 3: Exemption of federal taxes dueonimport/acquisition of material/equipment for movietheaters LINE 4: Box-office control system LINE 5: Digitalization of movie theaters

  33. Government support: The Audiovisual Sector Fund (FSA) The funds received from FSA are partially recoupable from the film’s net proceeds. The percentage of recoupment from each film project depends on various factors, including the overall budget, the total amount received and the percentage participation of FSA in the film’s budget. Investments made by FSA

  34. Main forms of government support to the audiovisual industry: Besides, we also have support programs to the participation of Brazilian films/projects/professionals in international events. 

  35. Local government support: Local fund raising • In some cases, additional funding for audiovisual works can be raised from local initiatives/programs, such as: • Riofilme; • SP Cine. • They provide additional funding in compliance with their own guidelines.  • Most local initiatives/programs of this kind require the Brazilian producer involved in the making of the film be established in their state/city.

  36. Law 12,485 (“Pay-TV Law”) Most important results: more Brazilian content on Brazilian Pay-TV and a booming market for the Brazilian audiovisual industry. Law 12,485 establishes two kinds of quotas: a channel’s quota and a programming quota.

  37. Law 12,485 (“Pay-TV Law”) Quota per channel The channel’s quota establishes a minimum of three and a hours per week of Brazilian productions to be shown in prime time by Pay TV “channels of qualified space” – those that exhibit, in their prime time, a range of “dramaturgical” programs, such as fiction, documentaries, animation, sitcoms etc. Besides, half of these productions must be produced by independent Brazilian production companies.

  38. Law 12,485 (“Pay-TV Law”) The programming quota means that in each three “channels of qualified space” – that is, Pay TV channels that show dramaturgical programs in prime time – one must be a “Brazilian channel of qualified space”. The maximum programming quota is 12 Brazilian channels. Among those channels, one-third must be programmed by a Brazilian independent programmer. Moreover, among those Brazilian channels, at least two of them must show 12 hours of independent Brazilian production, 3 hours in prime time. The packages containing news channels must include another one with a different editorial line in order to maintain diversity of opinion and information.

  39. Law 12,485 (“Pay-TV Law”) This Federal Law came into force on Setember 12th, 2011, and was regulated by ANCINE’s Normative Instruction N. 100 of May 29th of 2012, and positive results can already be seen.

  40. Law 12,485 (“Pay-TV Law”) Hours of Brazilian content per year - 14 Channels - 2010-2013

  41. Law 12,485 (“Pay-TV Law”) Number of Brazilian independent production companies registered at ANCINE - 2010-2014

  42. The Brazilian Film Market in Figures ¹Highest number of films released during a year in the history of Brazilian film. ²Preliminary figures. ¹Preliminary figures.

  43. The Brazilian Film Market in Figures ¹Preliminary figures. Note: In 2012, 5 Brazilian films had each more than 1 million tickets sold In 2013, 10 Brazilian films had each more than 1 million tickets sold In 2014, 6 Brazilian films had each more than 1 million tickets sold ¹Preliminary figures.

  44. The Brazilian Film Market in Figures ¹Preliminary figures. ¹Preliminary figures. ¹Preliminary figures.

  45. The Brazilian Film Market in Figures ¹Preliminary figures. ¹Preliminary figures.

  46. Film co-productions between Brazil and other countries carried out from 2005 to 2014 • Total of 96 international co-productions

  47. Co-production involving Brazil and France

  48. Thank you! Eduardo Valente assessoria.internacional@ancine.gov.br

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