Digital Media Tax Credit
Highlights
This program is a fantastic opportunity for your business to receive financial support for developing interactive digital media products. You can get a refundable tax credit for up to 50% of eligible labor costs or 25% of total expenditures made in Nova Scotia. Additionally, if your business operates outside the Halifax Regional Municipality, you can benefit from a 10% geographic area bonus on labor expenditures.
What You Get:
- Up to 60% tax credit on qualifying expenditures
- Up to $100,000 credit on marketing and distribution costs, even if spent outside Nova Scotia
This tax credit can significantly reduce your development costs, making it easier to invest in high-quality projects. The application process is straightforward, and if approved, this financial boost can help you expand your business, hire more talent, and enhance your product offerings.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- This is a refundable tax credit. There are no repayment terms or interest rates.
Eligible Expenses:
- Costs directly related to the development of interactive digital media products.
- Eligible Nova Scotia labour expenditures.
- Total expenditures made in Nova Scotia.
- Marketing and distribution expenditures, up to $100,000 per product.
Ineligible Expenses:
- Operating system software.
- Application software (e.g., database, spreadsheet, word processing).
- Products developed primarily for interpersonal communications (e.g., cellphone, e-mail software).
- Products that are pornographic or discriminatory.
- Products primarily used to advertise or promote a corporation or organization.
Fees:
- There are no fees associated with this tax credit program.
Qualifications
- Must be a taxable Canadian corporation.
- Must have a permanent establishment in Nova Scotia, which includes:
- A fixed place of business in the province.
- Assets in the province to develop the product.
- Personnel in the province who can contract on behalf of the corporation.
- Digital media product must be interactive.
- Primary purpose of the product must be to educate, inform, or entertain users.
- Product must present information in at least two of three formats: text, sound, or images.
To be eligible for the geographic area bonus:
- Must have a permanent establishment outside the Halifax Regional Municipality.
- At least 50% of salaries for the development of the product must be paid to employees who work out of a permanent establishment in the eligible geographic area.
Disqualifications:
- Corporation must not be a prescribed labour-sponsored venture capital corporation under the federal Income Tax Act.
- Products that are operating system software.
- Products that are application software (e.g., database, spreadsheet, word processing).
- Products developed primarily for interpersonal communications (e.g., cellphone, e-mail software).
- Products that are pornographic or discriminatory.
- Products primarily used to advertise or promote a corporation or organization.
Description
This program offers a refundable tax credit for costs related to developing interactive digital media products in Nova Scotia. Your business can receive up to 50% of eligible labor costs or 25% of total expenses made in the province. If your business operates outside the Halifax Regional Municipality, you can get an additional 10% bonus on labor costs and 5% bonus on total expenses.
You can also get a credit for marketing and distribution expenses, up to $100,000 per product, even if these expenses occur outside Nova Scotia. This can help you promote and distribute your digital media products more effectively.
The tax credit is designed to support your business in creating interactive digital media that educates, informs, or entertains users. This financial support can significantly reduce your development costs, making it easier for you to innovate and grow.
Program Steps
Download Application Forms: Visit the Nova Scotia Department of Finance and Treasury Board website and download the Digital Media Tax Credit information and application forms (ZIP file).
Prepare Documentation: Gather the necessary documents to support your application. You will need:
- Financial statements
- Proof of permanent establishment in Nova Scotia
- Details of the interactive digital media product
- Evidence of eligible Nova Scotia labour expenditures
- Marketing and distribution expenditure details (if applicable)
Complete Application Forms: Fill out the downloaded application forms with accurate and detailed information about your business and the digital media product.
Review Eligibility Criteria: Ensure your application meets all the eligibility criteria, including being a taxable Canadian corporation with a permanent establishment in Nova Scotia, and that your product qualifies as an interactive digital media product.
Submit Application: Send the completed application forms and all required documentation to the Nova Scotia Department of Finance and Treasury Board.
Await Review: The Department will review your application to confirm eligibility and completeness. They may contact you for additional information if needed.
Receive Tax Credit: Once approved, you will receive the refundable tax credit for your eligible expenditures.
