Digital Animation Tax Credit
Highlights
This program is a fantastic opportunity for your business. It offers a refundable corporate tax credit for qualifying labor expenditures related to digital animation productions. This means you can get back a significant portion of your investment in your animation projects.
Key Benefits:
- Up to 50% of eligible Nova Scotia labor expenditures can be claimed.
- An additional 17.5% tax credit on labor directly related to animation activities.
- Refundable credit means you receive the money back, even if you owe no taxes.
Why Apply?
- Financial Relief: Helps reduce your production costs significantly.
- Easy Qualification: If your business fits the criteria, the application process is straightforward.
- Boost Your Production: More funds available to invest in high-quality animation, enhancing your competitive edge.
Applying for this program can provide substantial financial support, making it easier for you to focus on creating outstanding digital animation content.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- This is a refundable tax credit, meaning you do not need to repay it. There are no interest rates associated with this credit.
Eligible Expenses:
- Qualifying labour expenditures directly related to the development of eligible digital animation productions.
- Eligible overhead expenditure, calculated as 65% of the eligible Nova Scotia labour expenditure.
- Eligible remuneration, less twice the value of any assistance received.
Use of Funds:
- Funds can be used towards:
- Labour costs directly related to digital animation production.
- Overhead costs associated with the production.
- Remuneration for services directly related to the production.
Restrictions on Use of Funds:
- Funds cannot be used for productions that are eligible to receive the Nova Scotia Film and Television Production Incentive Fund.
Fees:
- There are no fees associated with claiming this tax credit.
Qualifications
- Must be an eligible corporation in Nova Scotia.
- Must have qualifying labour expenditures directly related to the development of eligible digital animation productions.
- Must submit a mandatory Part A application before beginning principal photography or key animation.
- Must submit a mandatory Part B application no later than 30 months after the end of the tax year in which expenditures were made.
Must provide additional forms/documents such as a producer affidavit, certificate of election, and declarations of residency.
Disqualifications:
- Productions eligible to receive the Nova Scotia Film and Television Production Incentive Fund.
Description
The Digital Animation Tax Credit (DATC) offers your business a refundable corporate tax credit. This can help you cover costs related to developing digital animation productions.
You can claim up to 50% of eligible Nova Scotia labour expenses or 25% of those expenses plus eligible overhead costs. Additionally, there's an extra 17.5% credit for labour directly tied to animation activities. This means more money back in your pocket for hiring local talent and covering production costs.
Once you receive your Tax Credit Certificate, you can apply this credit to your corporate tax return. This program is a great way to reduce your tax burden while investing in your digital animation projects.
Program Steps
Submit Part A Application:
- Complete and submit the Part A application form to apply for an Eligibility Certificate.
- Ensure this is done before beginning principal photography or key animation of your digital animation production.
Prepare Necessary Documentation:
- Gather the following documents to support your application:
- Producer affidavit
- Certificate of election
- Declarations of residency
- Gather the following documents to support your application:
Receive Eligibility Certificate:
- Wait for approval of your Part A application to receive the Eligibility Certificate.
Complete Production:
- Finish your digital animation production as per the guidelines.
Submit Part B Application:
- Complete and submit the Part B application form to apply for a Tax Credit Certificate.
- Ensure this is done no later than 30 months after the end of the tax year in which expenditures were made.
Receive Tax Credit Certificate:
- Wait for approval of your Part B application to receive the Tax Credit Certificate.
Claim Tax Credit:
- Use the Tax Credit Certificate to claim the tax credit on your corporation's T2 corporate tax return with the Canada Revenue Agency.