Ontario Computer Animation and Special Effects Tax Credit
Highlights
This program is designed for businesses like yours that specialize in computer animation and special effects. It offers a refundable tax credit based on your Ontario labour expenditures. This means you can get back 18% of what you spend on eligible activities, with no cap on the amount you can claim.
Why Apply?
- Financial Relief: Get a significant portion of your labour costs refunded.
- Flexibility: Combine this credit with other tax credits like the Ontario Film and Television Tax Credit (OFTTC) or the Ontario Production Services Tax Credit (OPSTC).
- No Cap: There is no limit on the amount of eligible Ontario labour expenditures you can claim.
Benefits to Your Business
- Boost Cash Flow: Improve your financial stability by reducing your labour costs.
- Easy Qualification: If your business is already established in Ontario and involved in eligible activities, you likely qualify.
- Support for Growth: Use the refunded money to reinvest in your business, hire more talent, or upgrade your technology.
Applying for this program can provide your business with the financial support it needs to thrive and grow in the competitive field of computer animation and special effects.
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:
- Salaries and wages paid to Ontario residents.
- Payments to freelancers, including individuals, partnerships, or incorporated individuals.
- Labour expenditures incurred and paid within the taxation year or within 60 days after the end of the taxation year.
Ineligible Expenses:
- Audio effects, in-camera effects, credit rolls, and subtitles.
- Animation or visual effects created by editing activities.
- Animation or visual effects for promotional material.
- Overhead activities, legal, accounting, and marketing costs.
Fees:
- Administration fee of 0.15% of eligible expenditures, with a minimum fee of $500 and a maximum fee of $10,000.
- Additional filing fee of $100 for applications received more than 24 months after the year-end of the claim.
- Fee of $100 for each amended certificate.
Qualifications
- Must be a Canadian corporation.
- Must be Canadian or foreign-owned.
- Must have a permanent establishment in Ontario.
- Must file an Ontario corporate tax return.
- Must be an animation company, visual effects house, post-production company, or 3D service provider working under contract to the production’s producer.
- Must incur a minimum of $25,000 in eligible Ontario labour expenditures for each film or television production for which the tax credit is claimed.
Eligible productions must be created for commercial exploitation and not fall within excluded genres.
Disqualifications:
- Productions in the following genres:
- News, current events, or public affairs programming.
- Talk shows.
- Game, questionnaire, or contest productions (other than those directed primarily at minors).
- Sports events or activities.
- Gala presentations or awards shows.
- Productions that solicit funds.
- Reality television.
- Pornography.
- Advertising.
- Productions primarily for industrial, corporate, or institutional purposes.
- Productions consisting substantially of stock footage.
- Instructional productions, including instructional videos or tutorials.
- Reviews or commentary, opinion, or advice videos.
- Educational content related to a curriculum or course of study (other than productions directed primarily at children under 12).
- Vlogs, travelogues, video journals or diaries, home movies, or productions primarily consisting of recreational content.
- Music videos.
- Productions related to esports, gaming, or gambling.
- Prank videos.
- Speeches, sermons, presentations, or discourses.
- Coverage of conferences, gatherings, ceremonies, or events.
- Productions primarily consisting of content from another film, television, or interactive digital media production previously released to the public.
- Productions consisting substantially of user-generated footage.
- Productions in the following genres:
Description
The program offers a refundable tax credit based on eligible Ontario labor costs for computer animation and special effects activities. This means your business can get back 18% of the money you spend on these activities.
Here's what you can use it for:
- Designing and modeling
- Rendering and lighting
- Painting and animating
- Compositing
Key benefits:
- No cap on eligible labor costs: You can claim as much as you spend.
- Additional claims: You can claim this tax credit along with other Ontario film and television tax credits.
This program is a great way to reduce your costs and invest more in your business. The tax credit is administered by Ontario Creates and the Canada Revenue Agency, ensuring you get the support you need efficiently.
Program Steps
Gather Required Documentation: Prepare the following documents to support your application:
- Financial statements
- Business plan
- Details of eligible Ontario labour expenditures
- Contracts with visual effects or animation service providers
- Proof of Ontario residency for employees
- Employment agreements for claimed positions
Complete the Application Form: Fill out the application form provided by Ontario Creates. Ensure all information is accurate and complete.
Submit the Application to Ontario Creates: Send your completed application form and required documentation to Ontario Creates for review.
Receive Certificate of Eligibility: Once your application is reviewed and approved, Ontario Creates will issue a Certificate of Eligibility.
File Tax Return with CRA: Submit the Certificate of Eligibility along with your corporate tax return to the Canada Revenue Agency (CRA) to claim the tax credit.
Pay Administration Fee: Pay the OCASE tax credit administration fee, which is 0.15% of eligible expenditures, with a minimum fee of $500 and a maximum fee of $10,000 per application.
Monitor Application Status: Follow up with Ontario Creates and CRA if necessary to ensure your application is processed in a timely manner.
Receive Tax Credit: Once approved by CRA, the tax credit amount, net of any Ontario taxes owing, will be paid to your corporation. If no taxes are owed, the full amount will be disbursed.