27 AUG 2021

Streaming platforms will have to invest in local production in Portugal

It will be from January 1, 2022, when the new Cinema Law comes into force, which will create a 1% tax on the income of streaming platforms that operate in the country.

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When the new Cinema Law enters into force on January 1, 2022, Portugal will force streaming platforms to invest in local production. One of the novelties of the legislation is the creation of a one percent tax on the income of streaming platforms that operate in the country, and the proceeds of the collection will revert to the institute of cinema and audiovisual (Instituto do Cinema e Audiovisual, ICA).

Streaming platforms will have the obligation to invest in film and audiovisual production in Portugal in a similar way to what is already happening with other local operators. If it is not possible to determine the value of the so-called “relevant benefits”, these operators pay an annual fee of €1 million and the investment obligation is set at €4 million. According to the regulations, the payment of the annual fee is made by the operators "until April 30 of the year following the one to which the relevant income data is reported," the regulations indicate.

The current exhibition rate of 4% on the transmission of advertising on television channels, and whose charge reverts to the ICA and Cinemateca, will also cover the services of video exchange platforms, such as YouTube.

It is worth noting that there will also be changes in the case of Rádio e Televisão de Portugal (RTP). Until now, the public operator had the obligation to invest 8% of the contribution for the audiovisual sector - excluding the proportion destined to the radio service - in productions in the Portuguese language. The amount that will be allocated from now on to the production of films, series, documentaries or animation amounts to 10%.

The President of Portugal, Marcelo Rebelo de Sousa, promulgated this regulation on August 13, but acknowledged the "difficulties in adapting to legal definitions" and that "investment obligations did not achieve the intended effect."

This update of the cinema law was approved in 2020 in a controversial environment and divided by the sector, on the form of financing for new operators and on the application of rates and investment taxation.

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