British Columbia production services tax credit

• Basic production services tax credit covers 28% of accredited qualified BC labour expenditures per tax year.
• Regional production services tax credit provides an additional 6% of accredited qualified BC labour expenditures when certain regional criteria are met.
• Distant location production services tax credit offers an additional 6% of accredited qualified BC labour expenditures for productions in designated distant locations.
• Digital animation, visual effects, and post-production (DAVE) services tax credit delivers 16% of accredited qualified BC labour expenditures directly related to prescribed digital activities.
• Credits are fully refundable but must be applied against total income tax payable before any refund is issued.

• The applicant must be a corporation with a permanent establishment in British Columbia during the tax year.
• The corporation must primarily carry on a film or video production business, or a film or video production services business, throughout the tax year.
• The applicant must incur qualified British Columbia labour expenditures.
• The applicant must not claim the British Columbia film and television tax credit for the same production.
• The corporation must obtain an accreditation certificate from Creative BC and follow the certification and filing requirements.

Who is eligible?

• Domestic film or video production companies with a permanent establishment in British Columbia
• Foreign film or video production companies with a permanent establishment in British Columbia
• Corporations primarily engaged in film or video production or production services

Who is not eligible

• Companies that claim the British Columbia film and television tax credit for the same production.
• Animated productions that began key animation on or after June 1, 2024, are not eligible for the regional and distant location production services tax credits.
• Companies not primarily engaged in film or video production or production services throughout the tax year are ineligible.

Eligible expenses

• Accredited qualified British Columbia (BC) labour expenditures related to film or video production.
• BC labour expenditures directly attributable to digital animation, visual effects, and post-production (DAVE) activities.

Eligible geographic areas

• British Columbia
• Designated Vancouver area (for certain regional and distant location credits)
• Areas within British Columbia outside the designated Vancouver area (for regional and distant location credits, with specific exclusions)

• Step 1: Notify Intent to Claim Tax CreditNotify Creative BC of your intent to claim the British Columbia production services tax credit within 120 days of incurring your first accredited BC labour expenditure (ABCLE) for the production.
• Ensure the pre-certification form is filed on time to be eligible for expenditures incurred prior to the notification.
• Step 2: Obtain Accreditation CertificateRequest and obtain an accreditation certificate from Creative BC for the production.
• This certificate is required before submitting the tax credit claim.
• Step 3: Complete Required FormsFill out Form T1197, British Columbia Production Services Tax Credit, for each accredited production.
• Complete Schedule 5, Tax Calculation Supplementary – Corporations, entering the credit amount on line 672.
• Step 4: Submit Application with Tax ReturnAttach the accreditation certificate (or copy), Form T1197, and Schedule 5 to your corporate income tax return.
• If filing electronically, follow the “T2 Attach-a-Doc” procedure to submit required documents to the Canada Revenue Agency (CRA).
• If filing a paper return, mail your return and all required attachments to your designated tax centre.
• Step 5: Meet Filing DeadlinesEnsure your complete application is filed with the CRA no later than 18 months after the end of the tax year (or 36 months for tax years starting before February 19, 2020).

• The credits are fully refundable but must be first applied against total income tax payable before a refund is issued.
• If you miss the 120-day pre-certification deadline, accredited BC labour expenditures incurred before the date of filing may not be eligible for the credit.
• For tax years starting before February 19, 2020, the deadline to file required documents is 36 months after the end of the tax year; otherwise, it is 18 months.
• Changes announced mean animated productions beginning key animation on or after June 1, 2024, are not eligible for regional and distant location production services tax credits.