The following article will help you navigate the Canadian Film & Television Tax Credits for film and television and film production. These includes: (i) The Canadian Film or Video Production Tax Credit (PTC), Ontario Film and Television Tax Credit (OFTTC) and Ontario Production Services Credit (OPSTC).
Take a look at the article, Top Ten Legal Pitfalls For New Producers, to understand the other legal areas of a production to watch out for.
Canadian Film or Video Production Tax Credit (PTC) is 25% of qualified labour expenditures incurred by a qualified corporation for the film production of a Canadian film or video production.
- PTC – in order to determine whether a production qualifies as “Canadian”
- Production company must be a Canadian controlled corporation from the start of production to its completion in order to access the tax credits.
- The majority of the voting interests have to be held by Canadian citizens or permanent residents of Canada to be Canadian controlled.
- The activities must be primarily the carrying of a Canadian film or video production business through a permanent establishment in Canada
- The Producer must be a citizen or permanent resident of Canada at all times during the production. All individuals performing “producer related” responsibilities must be Canadian (exceptions exists such as courtesy credits, etc.).
- The production has to meet “Canadian creative points test” and the production must earn a minimum of six points (live action). Either the Director or Screenwriter or on of the two highest paid leading performers must be Canadian:
- Director (2 points)
- Screenwriter (2 points)
- Highest and Second paid lead performer
- Production Designer/Art Director
- Director of Photography
- Music Composer
- Picture Editor
- The production company must have the exclusive worldwide copyright in the production for all commercial exploitation purposes for a minimum of 25 years commencing when the production is completed and is commercially exploitable.
Ontario Film and Television Tax Credit (OFTTC) is equal to 30% of eligible labour cost with no cap. First time producers are eligible to an enhanced rate of 40% on the first $240,00 of labour costs.
- production company must have a permanent establishment in Ontario
- production company must be Canadian controlled and must be a qualified corporation for the purpose of the federal tax credit
- film production company’s primary business must be the production of Canadian films and videos
- a minimum of 75% of all film production costs and 9% of post-production costs must be incurred in Ontario other than in the case of co-productions
- the film producer must be an Ontario resident for at least two years prior to the production
- the film must be shown in Ontario within two years of completion of principal photography by an Ontario based film distributor or Canadian broadcaster during prime time (between 7 pm and 11 pm)
- the production must attain at least 6 of the possible 10 CAVCO points
- a minimum of 85% of the total number of days of principal photography or key animation must be done in Ontario unless it is a documentary or treaty co-production.
- The Ontario Minister of Citizenship, Culture and Recreation must certify the production as an Ontario production.
Not eligible: TV programs not show in prime time other than children’s programming, non-Canadian controlled service productions, talk shows, reality TV and sports shows.
Regional bonus: of 10% on all Ontario labour expenditures available if shot outside of GTA in Ontario.
Ontario Production Services Tax Credit (OPSTC) is equal to 18% of Ontario labour expenditures.
- This tax credit is available to both Canadian and foreign film production companies producing in Ontario.
- No content requirements need to be satisfied
- Film production company must have a permanent establishment in Ontario (which includes a production office set up in Ontario during filming), and either owns the copyright in the production or contracts directly with the copyright owner.
- The corporation must be primarily engaged in the business of video or film production
- The film production must meet minimum budget levels of $100,00 per 30 minute episode or less of a television series, $200,00 per episode greater than 30 minutes and $1 million for all other productions.
- Cannot claims both the OFTTC and CPSTC for the same episodes of a television series.
- Ineligible genres: news shots, talk shows, game or contest productions, sports events, gala or award presentations, pornography, reality television and advertising or industrial productions.
Contact Entcounsel for more information.