Tax Credit Programs
Whether you are a local, national or international production company incurring expenses in Ottawa, there are a number of tax credits programs that can help reimburse you. Ontario has some of the most competitive tax credit programs in Canada, positioning Ottawa and the province to better attract foreign productions while marketing the region as “film-friendly”.
There are Federal Tax Credit programs as well as provincial ones. Please contact the administrative body regarding eligibility for tax credit programs. These programs usually require that the employee and production house reside in the same province.
Federal Tax Credit
Federal tax credits are administered by the Canadian Audio-Visual Certification Office (CAVCO).
There are two tax credit programs available at the federal level:
Canadian Film or Video Production Tax Credit (CPTC)
To be eligible for the CPTC, the applicant must be a Canadian-owned, taxable corporation that is primarily in the business of Canadian film or video production. The CPTC is available at a rate of 25% of the qualified labour expenditure.
Film or Video Production Services Tax Credit (PSTC)
To be eligible for the PSTC, the applicant can be either a foreign-owned corporation or a Canadian-owned corporation that is primarily in the business of film or video production services. The PSTC is a tax credit equal to 16% of salary and wages paid to Canadian residents or taxable Canadian corporations (for amounts paid to employees who are Canadian residents) for services provided to the production in Canada.
Provincial Tax Credits
Tax credit programs in the province of Ontario are administered by the Ontario Media Development Corporation (OMDC) in conjunction with Canada Revenue Agency (CRA) expenditures.
Ontario Film and Television Tax Credit
The OFTTC is generally calculated as 35% of the eligible Ontario labour expenditures incurred by a qualifying production company with respect to an eligible Ontario production. Productions that are shot in Ontario entirely outside of the Greater Toronto Area (GTA) can receive a 10% bonus on all Ontario labour expenditures incurred for the production.
Ontario Production Services Tax Credit
A refundable tax credit available to eligible Ontario-based Canadian and foreign-controlled corporations of 21.5% of qualified Ontario production expenditures for eligible film and television productions. This credit can be combined with the federal Film or Video Production Services Tax Credit of 16% of qualified Canadian labour expenditures.
Ontario Computer Animation and Special Effects Tax Credit
A refundable tax credit available to Ontario-based Canadian and foreign-controlled corporations of 18% of qualifying Ontario labour expenditures for digital animation and digital visual effects created in Ontario for film and television productions.
Ontario Interactive Digital Media Tax Credit
The Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit based on eligible Ontario labour expenditures and eligible marketing and distribution expenses claimed by a qualifying corporation with respect to interactive digital media products.
The OIDMTC is calculated as 40% of eligible Ontario labour expenditures and eligible marketing and distribution expenses incurred by qualifying corporations, regardless of size of corporation, to create “non-specified” interactive digital media products in Ontario.