Mexican President Felipe Calderon on Tuesday unveiled an extra 7.5% tax rebate for location shoots to lure large, foreign productions to Mexico.

The incentive has an initial cap of $20 million and applies to applicable expenditures in Mexico on equipment or services.

“We are determined to make Mexico the Latin American film capital,” Calderon said at Baja Estudios, a studio complex formally owned and operated by Fox, and key location for “Titanic” and “Pearl Harbor.”

The fund will be handled by Mexico’s international trade promotion agency ProMexico and will be in addition to the existing 10% sales tax rebate, for a total possible refund of 17.5%.

Hence, a production that spends $110 million in Mexico — taxes included — will be refunded $17.5 million, drawing $7.5 million of that from the new coin fund.

If productions look set to overwhelm the cap, the fund will double to $40 million.

The incentive package is geared to facilitate cross-border productions with a number of provisions to speed along visa applications and offer specialized security services.

The announcement comes on the heels of last year’s legal victories securing what is known as the 226 tax incentive program that allows Mexican companies to invest up to 20 million pesos ($1.58 million) each on productions and declare the coin a tax write-off.

Dovetailing with the new program, Mexican shingles can use the 226 incentive with foreign co-productions as long as 70% of the coin acquired through 226 goes to the Mexico spend and that at least 70% of the cast and crew crew is Mexican for that part of the production that uses the 226 coin.