Canadian Film or Video Production Tax Credit
Canada
Labour tax credit for producing Canadian films or videos
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Information and cultural industries
- Arts, entertainment and recreation
grant_single|grantors
- Canada Revenue Agency (CRA)
- Government of Canada
grant_single|status
grant_card_status|open
grant_single_labels|preview
Refundable tax credit of 25% of qualified Canadian labour expenses on Canadian film and video production.
grant_single_labels|projects
Eligible projects for the Canadian film or video production tax credit must be certified as Canadian productions and meet other specific conditions.
- Productions must be certified by the Canadian Audio-Visual Certification Office (CAVCO) as Canadian
- Corporations must primarily be Canadian film or video production businesses with a permanent establishment in Canada throughout the year
- Corporations cannot be tax-exempt at any time in the year
- Productions cannot be controlled by one or more tax-exempt person at any time in the year
grant_single|admissibleProjectsExample
$337,500
Vancouver
Production of a feature film exploring multiculturalism
$200,000
Montreal
Creation of a web series capturing the essence of Montreal's local art scene
$175,000
Calgary
Production of an indie film portraying the historical events
$225,000
Halifax
Development of a documentary series on Canadian wildlife
$250,000
Kitchener
Development of a TV series set in the tech industry of Kitchener
$262,500
Toronto
Creation of a children's animated series about environmental sustainability
grant_single_labels|admissibility
To be eligible for the Canadian film or video production tax credit, certain certifications and business criteria must be met.
- The production must be certified by the Canadian Audio-Visual Certification Office as a Canadian film or video production.
- Your corporation must primarily be a Canadian film or video production business with a permanent establishment in Canada throughout the year.
- Your corporation cannot be tax-exempt at any time in the year.
- Your corporation cannot be controlled by one or more tax-exempt persons at any time in the year.
grant_eligibility_criteria|who_can_apply
To be eligible for the Canadian film or video production tax credit, your corporation must primarily be a Canadian film or video production business with a permanent establishment in Canada throughout the year and must not be tax-exempt at any time in the year. Additionally, it should not be controlled by one or more tax-exempt persons at any time in the year.
- Must be a Canadian film or video production business.
- Must have a permanent establishment in Canada throughout the year.
- Cannot be tax-exempt at any time in the year.
- Cannot be controlled by one or more tax-exempt persons at any time in the year.
grant_eligibility_criteria|who_cannot_apply
There are certain types of companies that are not eligible for the Canadian film or video production tax credit.
- Companies that are tax-exempt at any time in the year.
- Companies controlled by one or more tax-exempt persons at any time in the year.
grant_eligibility_criteria|eligible_expenses
If eligible for the Canadian film or video production tax credit (CPTC), your corporation can get a refundable tax credit of 25% of your qualified labour expenditures. The qualified labour expenditures cannot be more than 60% of production costs (net of assistance).
- Refundable tax credit of 25% of qualified labour expenditures
- Qualified labour expenditures limited to 60% of production costs (net of assistance)
grant_eligibility_criteria|zone
The eligible geographic zone for the Canadian film or video production tax credit grant is Canada. The corporation must have a permanent establishment in Canada throughout the year to be eligible.
- Canada
grant_single_labels|criteria
There are evaluation and selection criteria for this grant. The eligibility criteria include:
- Production must be considered Canadian according to the Canadian Audio-Visual Certification Office
- Minimum Canadian content requirements must be met
- Production costs must meet certain thresholds
- Completion and delivery deadlines must be adhered to
grant_single_labels|register
- Step 1: Get a Canadian film or video production certificate (Part A) or a certificate of completion (Part B) from the Canadian Audio-Visual Certification Office (CAVCO).
- Step 2: Fill out the following forms and send them to the Canada Revenue Agency (CRA), along with your CAVCO certificate (or a copy):
- T2, Corporation Income Tax Return
- Form T1131, Canadian Film or Video Production Tax Credit
- Step 3: If you are making multiple claims, include all corresponding CAVCO or provincial certificates with your T2 return.
- Step 4: Keep all financial documents to support your claim.
- Step 5: If filing electronically, send your CAVCO certificate to the CRA using My Business Account or by mail to your CRA film services unit. If filing a paper T2 return, send the return and required documents to your tax centre.
- Step 6: After submission, the CRA’s film services unit will conduct a risk assessment and may select the claim for audit. Respond promptly to any CRA queries and provide any additional requested information.
grant_single_labels|otherInfo
If your claim is incomplete, the CRA will ask you to provide the missing information before it reviews your claim.
- Keep all financial documents to support your claim.
- Your claim is considered complete if Form T1131 and your CAVCO certificate are attached to your corporation’s T2 return.
- If filing electronically, you still need to send your CAVCO certificate to the CRA.
- Send your CAVCO certificate to the appropriate CRA film services unit based on the location of your corporation's books and records.
- Maintain your CAVCO certificates, tax slips, documents and records for at least six years.
- Respond promptly to CRA’s questions and provide additional information requested to avoid delays.
- The CRA aims to review T2 returns within 60 days without an audit and 120 days with an audit, meeting these standards at least 90% of the time.
- Use the Check CRA Processing Times tool to get an estimated completion time for your request.
- If selected for an audit, provide requested documents quickly to avoid processing delays.
- The CRA may ask for books, records, agreements, minute books, and other documents during the audit.
- The CRA usually limits its audit to a given year but may expand it to other years if necessary.
- Re-audits may occur if new information arises, reassessment is requested, another tax credit is claimed, the CAVCO certificate is revoked, or fraud/misrepresentation is identified.
- The CRA may select your T2 return for audit as part of its regular audit program.
- Object to an unfavorable assessment outcome by filing an objection for reasons such as dissatisfaction with the explanation, denied adjustment requests, or legal interpretation disputes.
- The Appeals Division will do an impartial review, and you can file an appeal with the Tax Court of Canada if still unsatisfied with the decision.
Apply to this program
Canadian Film or Video Production Tax Credit
The Canadian Film or Video Production Tax Credit (CPTC) is a refundable tax credit aimed at encouraging Canadian film and video production. This tax credit can provide 25% of qualified labour expenditures for certified productions, managed by the Canada Revenue Agency (CRA) and the Department of Canadian Heritage via the Canadian Audio-Visual Certification Office (CAVCO).
Understanding the Canadian Film or Video Production Tax Credit (CPTC)
The Canadian Film or Video Production Tax Credit (CPTC) is a government initiative designed to stimulate the Canadian film industry by supporting domestic productions. It provides a refundable tax credit of up to 25% on qualified labour expenditures for productions that meet specific criteria outlined by the Canada Revenue Agency (CRA) and the Department of Canadian Heritage through the Canadian Audio-Visual Certification Office (CAVCO). Here, we provide an in-depth explanation of this valuable tax credit, detailing how to qualify, apply, and what to expect after submitting a claim.
Objectives and Benefits of the CPTC
The primary objective of the CPTC is to incentivize and bolster the production of Canadian content while fostering growth within the local film and video industry. The program seeks to: - Encourage the creation of high-quality Canadian film and video productions. - Provide financial relief to production companies through a refundable tax credit. - Promote employment and skill development within the Canadian film industry. This tax credit can offer producers significant savings on labour costs, allowing them to reallocate funds to enhance their productions or take on new projects, ultimately contributing to the growth of Canada's film and video production sector.
Eligibility Criteria for the CPTC
To qualify for the CPTC, a production and the corporation behind it must meet several specific criteria:
Production Certification by CAVCO
Firstly, the production must be certified as a Canadian film or video project by the Canadian Audio-Visual Certification Office (CAVCO). This certification can be in the form of a Canadian film or video production certificate (Part A) or a certificate of completion (Part B).
Corporate Requirements
The corporation applying for the CPTC must: - Primarily be a Canadian film or video production business with a permanent establishment in Canada throughout the year. - Not be tax-exempt at any time during the year. - Not be controlled by one or more tax-exempt entities at any time during the year.
The Application Process
Step 1: Obtain Certification from CAVCO
Before applying for the tax credit, you must secure a Canadian film or video production certificate (Part A) or a certificate of completion (Part B) from CAVCO. This certification verifies that the production meets Canada's content and expenditure requirements.
Step 2: Completing the Necessary Forms
After receiving certification from CAVCO, the following forms need to be completed and submitted to the CRA along with a copy of the CAVCO certificate: - T2 Corporation Income Tax Return. - Form T1131: Canadian Film or Video Production Tax Credit. Ensure you follow the instructions provided in Guide RC4164, Canadian Film or Video Production Tax Credit. For television productions, each episode in a series is considered a separate production. However, the CRA permits the use of a single form for episodes in a series that are certified collectively by CAVCO as a Canadian production.
Step 3: Submission
If filing your T2 return electronically, you must still submit your CAVCO certificate to the CRA. This can be done electronically via My Business Account or by mailing it to the appropriate CRA film services unit, which is usually determined by the location of your corporation's books and records. If your books and records are housed outside of Canada, the certificate should be sent to the Fraser Valley Film Services Unit. If you are filing a paper T2 return, ensure you include the return and required documents, then send them to your CRA tax centre, which will forward the documents to the appropriate film services unit.
What Happens After You Apply
Following submission, the CRA's film services unit will conduct a risk assessment of your claim and may select it for audit. It is essential for applicants to maintain comprehensive financial documentation and original copies of all relevant certificates and agreements to support their claim.
Service Standards
The CRA has established service standards for reviewing T2 returns that involve the CPTC: - 60 calendar days from the receipt of a complete claim, provided no audit is conducted. - 120 calendar days from the receipt of a complete claim, if an audit is performed. These timelines aim to ensure that 90% of cases are processed within the stipulated periods.
Audit Process
If your claim is selected for an audit, the CRA will request supporting documents, such as: - Books, records, and other documentation of your corporation. - Financing and distribution agreements. - Agreements with cast and crew. - The minute book of the qualified corporation and any related corporations. - Any other documents pertinent to your claim. The CRA typically limits its audit scope to a specific year but retains the right to expand the audit to other years or review other items in the corporation's T2 return. Once the audit is completed, you will be notified via letter.
Additional Review
Previously audited or accepted claims may be subject to an additional review if new information affects the amount of assistance, a reassessment for the claim is requested, another film or media tax credit is requested for the same production, the CAVCO certificate is revoked, or any fraud or misrepresentation of facts is identified.
Objecting to an Unfavourable Outcome
If you disagree with the CRA's assessment, you may file an objection for reasons such as dissatisfaction with the explanation of your assessment, denial of an adjustment request, or disputes over the interpretation of the law. The Appeals Division provides an impartial review of the file. If you remain unsatisfied after this review, you have the right to file an appeal with the Tax Court of Canada.
Conclusion
The Canadian Film or Video Production Tax Credit is a crucial financial support mechanism that helps enhance the competitiveness and quality of Canadian film and video productions. By understanding and navigating the eligibility criteria and application process, corporations can effectively leverage this tax credit to drive growth and innovation in the Canadian audiovisual sector. Ensure your claims are complete, maintain all supporting documents, and respond promptly to any CRA inquiries to optimize the benefits derived from this valuable tax credit.
