Digital Media Tax Credit NS Canada

Digital Media Tax Credit

NS, Canada
Tax credit for interactive digital media production in Nova Scotia
grant_single_labels|summary
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grant_single_labels|projects
grant_single_labels|admissibility
grant_single_labels|criteria
grant_single_labels|register
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grant_single|eligibleFinancing
  • grant_single|projectCostPercent
grant_single|deadlines
  • grant_single|closingDateMay 17, 2024
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
  • Information and cultural industries
grant_single|grantors
  • Finance and Treasury Board (NB)
  • Government of Nova Scotia
grant_single|status
grant_card_status|closed

grant_single_labels|preview

Refundable tax credit of 50% for local labour costs or 25% of total funds spent in Nova Scotia in the development of an interactive digital media product.

grant_single_labels|projects

Eligible corporations must be located within certain areas of Nova Scotia to qualify for additional benefits under this grant. This ensures that the geographical focus aligns with the regional development objectives of the program.
  • All areas within Nova Scotia except those within thirty kilometers driving distance from Halifax City Hall in the Halifax Regional Municipality.
grant_single|admissibleProjectsExample

$140,000

Development of an interactive educational app for high school students focusing on environmental science

$95,000

Development of an interactive informational website on local wildlife conservation efforts

$125,000

Creation of a mobile game to promote energy conservation through engaging gameplay and challenges

$75,000

Implementation of an interactive digital guide for tourists visiting historical sites

$87,500

Creation and maintenance of a virtual interactive museum tour platform

$150,000

Design and development of an interactive platform for virtual art exhibitions

grant_single_labels|admissibility

Eligibility for the Nova Scotia Digital Media Tax Credit requires the corporation to meet specific criteria.
  • The corporation must be a taxable Canadian corporation, meaning it was incorporated in Canada, either federally or in a province.
  • The corporation must have a permanent establishment in Nova Scotia, typically a fixed place of business, assets, and personnel in the province.
  • The corporation cannot be a prescribed labour-sponsored venture capital corporation under the Income Tax Act (Canada).
  • The corporation may be controlled by either foreign or Canadian owners, with no restrictions on size, market capitalization, or number of employees.
  • The corporation must demonstrate ownership of the property rights of the product or be authorized by the product owner through a Certificate of Election form if it does not own the rights.

grant_eligibility_criteria|who_can_apply

The Nova Scotia Digital Media Tax Credit (DMTC) is available to corporations developing interactive digital media products, provided they meet certain criteria established by the Nova Scotia Department of Finance and Treasury Board.
  • Corporations must be taxable Canadian corporations as defined by Canadian tax legislation.
  • Corporations need to have a permanent establishment within Nova Scotia.
  • The corporation must not be designated as a prescribed labour-sponsored venture capital corporation.
  • The control of the corporation can be either by foreign or Canadian entities, with no restrictions on size.
  • The corporation must own the rights to the developed product or be authorized by the owner to use them.

grant_eligibility_criteria|who_cannot_apply

This grant is not available to certain companies and industries based on their main activity and status. The restrictions are in place to focus support on specific eligible products and uses of technology.
  • Labor-sponsored venture capital corporations as prescribed under the Income Tax Act (Canada).
  • Companies developing operating systems or application software such as word processing or spreadsheets.
  • Businesses creating products for interpersonal communications, like cell phone or email software.
  • Organizations producing products primarily for advertising, selling, or promoting goods and services.
  • Companies involved in creating products contrary to public policy, such as those with pornographic content or inciting hatred.

grant_eligibility_criteria|eligible_expenses

Eligible projects for the Nova Scotia Digital Media Tax Credit focus on the creation of interactive digital media products with the primary purpose of educating, informing, or entertaining users. These projects must involve the development of digital applications that enable user interaction with the content.
  • Development of video games that allow user control and interaction.
  • Creation of educational software providing adaptive learning experiences.
  • Production of informational applications that engage users through interactive features.

grant_eligibility_criteria|zone

The Nova Scotia Digital Media Tax Credit covers specific expenditures directly related to the development and production of eligible interactive digital media products.
  • Eligible salaries: Salaries and wages paid to employees who are residents of Nova Scotia and report to a permanent establishment of the eligible corporation in Nova Scotia.
  • Eligible remuneration: Labour component of third-party expenditures paid to arm's length entities or individuals for services rendered at a permanent establishment in Nova Scotia.
  • Marketing and distribution expenditures: Expenses directly attributable to advertising, promoting, or distributing the digital media product, capped at $100,000 per eligible product.
  • Outlays, expenses, losses, or replacement of capital: Costs directly related to the production of the eligible product incurred in Nova Scotia.

grant_single_labels|criteria

The evaluation and selection criteria for the Nova Scotia Digital Media Tax Credit (DMTC) ensure that the corporation and product meet specific eligibility requirements related to corporate status, product type, expenditures, and geographic location. These criteria help determine whether a corporation qualifies for the tax credit and the applicable amount.
  • The corporation must be a taxable Canadian corporation, as defined in subsection 89(1) of the Income Tax Act (Canada).
  • The corporation must have a "permanent establishment" in Nova Scotia.
  • The corporation must not be a prescribed labour-sponsored venture capital corporation under the Income Tax Act (Canada).
  • The product must be an "interactive digital media product" whose primary purpose is to educate, inform, or entertain the user.
  • The product must allow the user to interact meaningfully with the content.
  • Qualifying expenditures must be directly attributable to the development of the eligible interactive digital media product and incurred and paid in Nova Scotia.
  • For an additional regional bonus, the product development must occur within an "eligible geographic area of the Province".
  • The corporation must demonstrate ownership of the property rights of the product, or be authorized by the product owner through a Certificate of Election.
  • All applicable documentation, including expenditure reports, residency declarations, invoices, and certification reports, must be submitted as part of the application process.

grant_single_labels|register

Here are the steps to submit an application for the Nova Scotia Digital Media Tax Credit:
  • Step 1: Optional Preliminary Application (Part A)
    • Submit a Part A application for an advanced ruling on project eligibility.
    • Receive an estimate of the potential tax credit.
    • Note: This step is optional and not required to submit a Part B application.
  • Step 2: Gather Required Documentation
    • Complete the Application & Expenditure Report spreadsheet.
    • Collect Declaration of Residency Forms for all employees listed.
    • Prepare invoices for all third-party work completed, with required details included.
    • Prepare Statements of Eligible Remuneration for relevant invoices.
    • Obtain an Affidavit, Review Engagement Report, or Audit Report based on project budget.
    • Include Articles of Incorporation and Memorandum of Association, if applicable.
    • Include Shareholders Registry, if applicable.
    • Prepare a corporate chart and Gantt Chart.
    • Document the completed digital media product.
    • Provide chain of title documentation, if necessary.
    • Fill out the Exchange of Information Form.
  • Step 3: Submit the Application
    • Email the completed Application & Expenditure Report spreadsheet to the TFFRD.
    • Send a signed and dated paper copy of the application to the TFFRD.
    • Ensure all supporting documents are included with the application.
  • Step 4: Await Confirmation and Processing
    • Application will be processed by the TFFRD of the Department of Finance and Treasury Board.
    • Corporations will receive tax certificates to claim with annual income tax filings.
    • Applications can be submitted before product completion but may be subject to future review.

grant_single_labels|otherInfo

The Nova Scotia Digital Media Tax Credit offers a refundable tax credit for eligible corporations developing interactive digital media products within Nova Scotia. It includes eligibility criteria, applications processes, and restrictions on product types and expenditures that qualify for the credit.
  • The DMTC is not available for products primarily used as an operating system, application software, or for interpersonal communications.
  • Products used primarily to present, promote, or sell goods or services are not eligible for the tax credit.
  • Expenditures that can be claimed for Scientific Research and Experimental Development Tax Credit or Film Industry Tax Credit are not eligible for the DMTC.
  • The eligible geographic area excludes areas within thirty kilometres driving distance from Halifax City Hall in the Halifax Regional Municipality.
  • Part A applications provide an advanced ruling on eligibility but do not guarantee final approval.
  • Applications must be submitted within thirty months of the end of the taxation year in which expenses were incurred.
  • There are no administration fees required for processing DMTC applications.
  • The Minister of Finance and Treasury Board may revoke tax credit certificates if the product is not completed within 36 months or if compliance issues arise.
  • Corporations may recognize provincial contribution using "Produced with the assistance of the Nova Scotia Digital Media Tax Credit".

Apply to this program