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Nova Scotia digital animation tax credit
Last Update: March 4, 2026
Nova Scotia, Canada
Tax credit for digital animation in Nova Scotia
Tax Credits
Overview
Get a refundable tax credit equal to 50% of qualifying labour costs, as well as an additional credit of 17.5% for labour costs directly related to animation-specific activities.
At a glance
Funding available
Financing goals
- Integrate new technologies
- Develop a new product
Eligible Funding
- Up to 67% of project cost
Timeline
- Closing date : May 21, 2024
Eligible candidates
Eligible Industries
- Information and cultural industries
Location
- Nova Scotia
Legal structures
- For-profit business
Annual revenue
- All revenue ranges
Organisation size
- All organization sizes
Audience
- All groups
Activities funded
- Production of digital animation films with a minimum viewing time of 20 minutes.
- Development of digital animation projects intended for broadcast, distribution, or public viewing within 24 months of completion.
- Collaborative digital animation productions undertaken through production service or co-production agreements.
Examples of admissible projects:
$ 110,000
Develop an educational animation series to teach elementary mathematics
$ 160,000
Develop a 30-minute animated educational series for children about environmental conservation
$ 123,750
Create an interactive animated app to teach basic coding to children
$ 96,250
Produce a documentary-style animation on Canadian wildlife
$ 82,500
Create a 3D animated short film for children focusing on environmental conservation
Eligibility
- The applicant must be an incorporated Canadian-controlled corporation that is taxable in Canada.
- The corporation must have a permanent establishment in Nova Scotia, such as a fixed place of business and personnel in the province.
- The corporation must be primarily engaged (more than 50%) in film or video production.
- The project must involve the development of an eligible digital animation production with a minimum viewing time of 20 minutes, to be broadcast, distributed, or made available for viewing within 24 months of completion.
- The corporation must own the property rights of the production, or have authorization from the rights holder to claim the credit.
Who is eligible?
- Canadian-controlled corporations primarily engaged in film or video production (more than 50%)
- Corporations involved in the development of eligible digital animation productions
Who is not eligible
- Labour-sponsored venture capital corporations.
- Companies registered as an Equity Tax Credit company or a Community Economic Development Investment Fund.
Eligible expenses
- Salaries, wages, vacation pay, statutory holiday pay, sick leave pay, and taxable benefits (such as RRSP contributions, group insurance, or meals) paid to Nova Scotia resident employees directly involved in the production.
- Salaries or wages of third-party employees or owners providing direct services to the eligible production (excluding any profit margin and materials).
- Amounts paid for technical animation activities, such as designing, modeling, rendering, lighting, painting, animating, rigging, storyboarding, and compositing, directly linked to the production.
Eligible geographic areas
- Nova Scotia
Selection criteria
Yes, there are specific criteria for evaluating and selecting applications for the Nova Scotia Digital Animation Tax Credit. Applicants must ensure their corporation and production meet certain eligibility requirements.
- Corporation must be an "eligible corporation" under the defined terms.
- Corporation must demonstrate permanent establishment in Nova Scotia.
- Corporation must be Canadian-controlled and primarily engaged in film or video production.
- Corporation must not be a labor-sponsored venture capital corporation or registered under certain tax credit acts.
- Corporation must own property rights of the production or have authorization if not the owner.
- Production must have a minimum viewing time of 20 minutes.
- Production must be broadcast, distributed, or available for viewing within 24 months of completion.
- Production must have a production services agreement or written agreement with a distributor or broadcaster.
- Certain types of productions are deemed ineligible (e.g., fundraising, news, current events, etc.).
- NS Labour expenditures must be directly related to production and paid to NS residents.
- Eligible remuneration includes salaries or wages of third-party employees or owners providing services to the production.
How to apply
1
Part A Application - Obtain an Eligibility Certificate
- Submit a Part A application before the start of principal photography or key animation.
- Email a completed Part A application form to the Taxation and Federal Fiscal Relations Division (TFFRD).
- Include supporting documents such as synopsis & script, detailed locked budget, Certificate of Incorporation, Shareholder Registers, and any applicable agreements.
2
Receive Eligibility Certificate
Upon approval, receive an Eligibility Certificate indicating preliminary production eligibility and estimated DATC amount.
3
Part B Application - Obtain a Tax Credit Certificate
- Submit a Part B application no later than 30 months after the end of the taxation year in which expenditures were made.
- Email a completed Part B application form, including detailed expenditure reports like the Producers Affidavit, Review Engagement Report, or Audit Report, depending on production costs.
- Provide supporting documentation such as Production Service agreements, Eligibility Certificate, and any other applicable agreements.
4
Claim the Tax Credit
- Receive a Tax Credit Certificate confirming eligibility and credit value.
- File a T2 and Schedule 5 with the Canada Revenue Agency (CRA), attaching the Tax Credit Certificate.
- CRA will assess the T2 return, apply the credit to reduce tax payable, and refund any excess amount.
Additional information
- Part A applications must be submitted before principal photography or key animation begins.
- The Eligibility Certificate issued in Part A is only a preliminary indication and does not guarantee issuance of the tax credit.
- The Minister may revoke the Tax Credit Certificate if false or misleading information is provided, or material facts are not disclosed.
- Specific information about approved tax credits, with applicant consent, may be published for accountability purposes.
