Ontario Book Publishing Tax Credit
Highlights
The Ontario Book Publishing Tax Credit (OBPTC) is a fantastic opportunity for your business. This refundable tax credit covers 30% of your eligible pre-press, printing, and marketing expenses, up to $30,000 per book title. This means you can significantly reduce your costs and invest more in creating high-quality literary works.
Key Benefits:
- 30% Refundable Tax Credit: Get back a substantial portion of your expenses.
- Up to $30,000 per Book Title: Maximize your financial support for each project.
- Covers Print and Digital Formats: Flexibility to publish in various formats.
Applying for the OBPTC is straightforward, and qualifying is easier than you might think. By taking advantage of this program, you can enhance your financial stability, allowing you to focus on what you do best—publishing great books.
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:
- 100% of the costs for preparing a literary work for publication in print, digital, or electronic formats.
- 50% of the production costs for publishing a printed version of a book.
- Costs related to transferring a prepared digital or electronic version of a literary work into a form suitable for distribution.
Ineligible Uses:
- The funds cannot be used for translations of previously published literary works.
- The funds cannot be used for publications that do not meet the eligibility criteria, such as works with less than 90% new material or those not written by eligible Canadian authors.
Fees:
- Administration fee of 0.15% of eligible expenditures, with a minimum fee of $50 and a maximum fee of $200 per application.
- Additional filing fee of $100 for applications received more than 24 months after the first year-end of the claim.
- Fee of $100 for each Amended Certificate.
Qualifications
- Must be a Canadian-controlled corporation, as determined under sections 26 to 28 of the Investment Canada Act (Canada).
- Must carry on a book publishing business primarily through a permanent establishment in Ontario.
- Must file an Ontario corporate tax return.
- Must allocate more than 50% of its taxable income to Ontario in the taxation year the credit is being claimed.
Must have published at least two books in the previous year.
- Exception: This requirement is waived if the business has transferred its operations, amalgamated, or wound up its company.
Disqualifications:
- A translation of a previously published literary work.
- Literary works published before 2020 that are not published in an edition of at least 500 copies of a bound book.
- Publications that do not meet the eligible categories of writing: fiction, non-fiction, poetry, biography, children’s fiction, children’s non-fiction, children’s poetry, and children’s biography.
- Publications where less than 90% of the material is new and has not been previously published.
- Publications where less than 90% of the material is written by eligible Canadian authors.
- Publications where the ratio of text to pictures is less than 65% (except in the case of children’s books).
- Publications that are less than 48 printed pages in length (except in the case of children’s books).
Description
This program offers your business a refundable tax credit. You can get back 30% of your eligible expenses, up to $30,000 per book title. This credit covers costs like pre-press, printing, and marketing for both print and digital books.
Eligible expenses include:
- Preparing a literary work for publication
- Production costs for printed books
- Converting digital versions for distribution
This tax credit is a great way to reduce your publishing costs. It helps you invest more in quality content and reach a wider audience. The money you save can be used to grow your business, publish more titles, or enhance your marketing efforts.
The tax credit is paid out after you file your corporate tax return. If you don’t owe any taxes, you get the full amount as a refund. This means more cash flow for your business, helping you manage your finances better.
Program Steps
Gather Required Documentation: Prepare the necessary documents for your application. You will need:
- Financial statements
- Business plan
- Details of eligible expenditures (pre-press, printing, marketing, etc.)
- Proof of Canadian-controlled corporation status
- Proof of Ontario corporate tax return filing
- Author Citizenship & Residency Declaration
Complete the Application Form: Fill out the application form provided by Ontario Creates. Ensure all sections are completed accurately.
Submit to Ontario Creates: Submit your completed application form along with the required documentation to Ontario Creates for a Certificate of Eligibility.
Receive Certificate of Eligibility: Once your application is reviewed and approved, you will receive a Certificate of Eligibility from Ontario Creates.
File with Canada Revenue Agency (CRA): Include the Certificate of Eligibility with your T2 Corporation Income Tax return and complete Schedule 564 (T2SCH564) for each literary work.
Upload Supporting Documents: Use the “T2 attach-a-doc” feature of your CRA-approved tax software to upload the Certificate of Eligibility and Schedule 564 when filing your T2 tax return. Alternatively, you can submit these documents via the My Business Account (MyBA) portal or by mail/fax to the appropriate CRA tax centre.
Pay Administration Fee: Pay the OBPTC administration fee, which is 0.15% of eligible expenditures, with a minimum fee of $50 and a maximum fee of $200 per application. If applicable, pay any additional filing fees for late applications or amended certificates.
Review and Approval: The CRA will review your submission. If everything is in order, they will process your claim and apply the tax credit to your account.
Receive Tax Credit: The amount of the tax credit, net of any federal and Ontario taxes owing, will be paid to your corporation. If no taxes are owed, the full amount will be paid out.
