Film or Video Production Services Tax Credit
Canada
Labour tax credit for film or video production in Canada
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
grant_single|grantors
- Canadian Heritage
- Government of Canada
grant_single|status
grant_card_status|open
grant_single_labels|preview
Tax credit of 16% on salaries and wages paid to Canadian residents working on a film or video production in Canada.
grant_single_labels|projects
In this grant, eligible projects are accredited film or video productions that meet the prescribed cost minimums and are of eligible genres.
- Productions employing Canadian residents in Canada
- Productions meeting the cost minimum requirement
- Productions not falling under the excluded genres
grant_single|admissibleProjectsExample
$48,000
Produce a documentary focused on indigenous cultures in Northern Canada with Canadian crew
$56,000
Create an animated series for children, hiring Canadian animators and voice actors
$48,000
Produce a web series that explores Canadian culinary traditions, hiring Canadian chefs and filmmakers
$40,000
Develop a short educational series for online platforms, employing Canadian writers and editors
$80,000
Develop a feature film that highlights Canadian wildlife, hiring Canadian producers and environmental experts
$72,000
Create a historical drama series based on Canadian history, employing Canadian actors and historians
grant_single_labels|admissibility
The Film or Video Production Services Tax Credit (PSTC) is a refundable tax credit aimed at encouraging the employment of Canadians in the film or video production industry. To qualify, productions must meet specific criteria regarding the nature of the corporation, production costs, and genre.
- The corporation applying for the PSTC must be an eligible production corporation.
- The production must meet a prescribed cost minimum requirement.
- The production must not fall under any of the excluded genre categories.
grant_eligibility_criteria|who_can_apply
The types of companies eligible for the Film or Video Production Services Tax Credit (PSTC) must be taxable Canadian corporations or foreign-owned corporations with activities primarily focused on film or video production or services in Canada. In addition, the eligible production corporation must not be exempt from tax, controlled by a tax-exempt entity, or a prescribed labour-sponsored venture capital corporation.
- Taxable Canadian corporations
- Foreign-owned corporations with a permanent establishment in Canada
- Primarily engaged in film or video production or production services
- Not exempt from tax under Part I of the Income Tax Act
- Not controlled by tax-exempt entities
- Not a prescribed labour-sponsored venture capital corporation
grant_eligibility_criteria|who_cannot_apply
There are specific types of companies that are not eligible for the Film or Video Production Services Tax Credit (PSTC) grant:
- Exempt from tax under Part I of the Income Tax Act (e.g. non-profit corporations or charitable corporations)
- Controlled directly or indirectly by entities whose taxable income is exempt from tax under Part I of the Act
- Prescribed labour-sponsored venture capital corporations for the purpose of section 127.4 of the Act
grant_eligibility_criteria|eligible_expenses
The eligible expenses for the Film or Video Production Services Tax Credit include Canadian labour expenditures that meet specific criteria.
- Salary or wages paid to employees of the corporation
- Remuneration other than salary or wages paid to a person or partnership
- Reimbursement by a wholly-owned corporation to its parent for eligible expenditures
grant_eligibility_criteria|zone
Eligible geographic zones for this grant include all regions within Canada where the production activities are carried out through a permanent establishment. Specifically, the Canadian labour expenditure must be related to services provided in Canada.
- All regions within Canada
- Permanent establishment in Canada
- Services provided in Canada
grant_single_labels|criteria
The evaluation and selection criteria for the Film or Video Production Services Tax Credit (PSTC) involve ensuring that the production meets specific requirements related to corporate eligibility, production cost minimums, and genre exclusions.
- The corporation applying must be an eligible production corporation.
- The production must meet a prescribed cost minimum requirement.
- The production must not fall under any of the excluded genre categories.
- Chain of title documentation must be provided to confirm copyright ownership.
- Canadian labour expenditures must be reasonable, directly attributable to the production, and paid to Canadian residents or taxable Canadian corporations for services performed in Canada.
grant_single_labels|register
- Step 1: Register for an Account
- Obtain a Government of Canada Access Key. Agree to the terms and conditions of Access Key and follow instructions to create a User ID and password.
- If you already have an Access Key, sign in using your existing User ID and password.
- Complete the PCH Service Registration by selecting "CAVCO – Tax Credit Programs" and agreeing to the CAVCO Privacy Statement.
- Perform your personal User Registration and wait for confirmation and a PIN, which will be emailed to you.
- Activate your User Registration by logging in with your Access Key User ID and password and entering the received PIN.
- Enroll in the PSTC program from the Program List on your My Applications page.
- Step 2: Complete the Application
- Select “New Application” and then “Form” beside PSTC in your eSubmission account.
- Fill out the required fields and attach all necessary supporting documents such as corporate information, financial information, production details, chain of title documents, official designee affidavit (if applicable), signed attestation, and application fee.
- Step 3: Submit the Application
- Review your completed application form and attached documents.
- Click “Proceed to Official Submission.”
- Complete the Attestation form, print it out, sign it, and send it to CAVCO with your application fee.
- Wait for your application status to change to "In Queue," indicating it will be reviewed on a first come, first served basis.
- Step 4: Provide Any Required Documentation or Information
- A tax credit officer will review the application and may request additional information through the Message Centre.
- Provide any requested information or clarification through the eSubmission system. Adjustments to the application will be managed by unlocking relevant sections for editing and resubmission.
- Step 5: Check Status of Submitted Application
- Monitor the status of your application through the "Status" column on your My Applications page.
- Wait for a final decision notification via the Message Centre. If the production is certified, you will receive an Accreditation Certificate. If denied or revoked, you will receive a notification.
grant_single_labels|otherInfo
The Film or Video Production Services Tax Credit (PSTC) offers a refundable tax credit to eligible production corporations employing Canadian residents for film or video production in Canada. This program is jointly administered by the Department of Canadian Heritage and the Canada Revenue Agency (CRA).
- The PSTC is available at a rate of 16% of the qualified Canadian labour expenditure.
- The application must be made through CAVCO's online eSubmission application system.
- The program is governed by Section 125.5 of the Income Tax Act and Section 9300 of the Income Tax Regulations.
- An application fee is required and must be made payable to the Receiver General for Canada.
- There is no cap on the amount of PSTC which can be received for a production.
- The PSTC is not available where a production has received the Canadian Film or Video Production Tax Credit.
- Certain genres are excluded from eligibility, such as news, reality TV, sports events and pornography.
- The Copyright Owner must apply to CAVCO for Accreditation Certificate, required for tax credit claims.
- Audit and compliance reviews may be conducted by CAVCO and CRA to verify the continuing eligibility of the project and the corporation.
Apply to this program
Film or Video Production Services Tax Credit (PSTC)
The Film or Video Production Services Tax Credit (PSTC) is a refundable tax credit designed to incentivize the employment of Canadian residents by Canadian and foreign-owned corporations engaged in film or video production. Administered by the Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency (CRA), the PSTC aims to support the Canadian film industry by providing a 16% credit on eligible Canadian labour expenditures.
Detailed Guide to the Film or Video Production Services Tax Credit (PSTC)
The Film or Video Production Services Tax Credit (PSTC) is a significant financial incentive program administered jointly by the Canadian Audio-Visual Certification Office (CAVCO) under the Department of Canadian Heritage and the Canada Revenue Agency (CRA). This tax credit aims to bolster the employment of Canadian residents in the film and video production industry, incentivizing both Canadian and foreign-owned production corporations to hire Canadian labour for their projects. This detailed guide delves into the PSTC's various aspects, eligibility criteria, application process, and administrative details, providing a comprehensive understanding for potential applicants.
Purpose and Objectives
The primary objective of the PSTC is to stimulate the employment of Canadians by providing financial incentives to production companies that use Canadian labour for their film and video projects. By offering a refundable tax credit, the PSTC reduces the financial burden on production companies, making Canada a more attractive destination for film and video production activities. This not only promotes local talent but also boosts the overall economy by increasing employment and encouraging high-quality productions within the country.
Eligibility Requirements
To qualify for the PSTC, a production must meet specific requirements outlined in the legislation and program guidelines. These requirements are divided into several categories, including corporate eligibility, production criteria, and financial thresholds.
Eligible Production Corporation
An eligible production corporation can be a taxable Canadian corporation or a foreign-owned corporation with a permanent establishment in Canada. The corporation's primary activities must involve film or video production or production services, with more than 50% of its activities dedicated to these functions. Additionally, certain types of corporations, including non-profit organizations, charitable entities, and prescribed labour-sponsored venture capital corporations, are excluded from receiving the PSTC.
Production Criteria
For a production to be eligible for the PSTC, it must meet the following criteria:
- It should not fall under any excluded genres such as news, talk shows, sports events, galas, solicitations for funds, reality TV, pornography, advertising, or productions primarily for industrial, corporate, or institutional purposes.
- It must meet prescribed cost minimums, with a production budget exceeding CAD 1,000,000 for a single production or specified cost thresholds for series episodes based on their running time.
Financial Information and Eligible Expenditures
The PSTC provides a tax credit of 16% on "qualified Canadian labour expenditure," which includes:
- Salaries and wages paid to Canadian resident employees for services rendered in Canada.
- Remuneration paid to Canadian residents or taxable Canadian corporations (including loan-out corporations) and partnerships for services performed in Canada.
- Reimbursements made by a wholly-owned subsidiary to its parent company for eligible labour costs.
These expenditures must be reasonable, directly attributable to the production, incurred after October 1997, and fall within the production stages from final script to post-production.
Application Process
The application for the PSTC involves several key steps, all of which are conducted through CAVCO's online eSubmission system:
Step 1: Register for an Account
Applicants must first create an account using the Government of Canada Access Key service, ensuring a secure and confidential application process.
Step 2: Complete the Application
Once registered, applicants must fill out the PSTC form in the eSubmission system, providing detailed information about the production, corporate structure, financials, and chain of title documentation.
Step 3: Submit the Application
After completing the application form and attaching all relevant documents, applicants must submit the application through the eSubmission system, print the attestation form, sign it, and send it along with the application fee to CAVCO.
Step 4: Provide Any Required Documentation
Upon submission, a tax credit officer reviews the application. Applicants might need to provide additional information or clarification as requested by the officer. All communications and document requests are managed through the Message Centre in the eSubmission system.
Step 5: Check Application Status
Applicants can monitor the status of their application through the eSubmission system. Once the review is complete, successful applicants receive an Accreditation Certificate, while those who do not meet the criteria are notified of the denial or revocation of their application.
Additional Features of the eSubmission System
The eSubmission system includes features such as the Delegate Access, allowing applicants to transfer project access to other users, and the Message Centre, facilitating communication between applicants and CAVCO officials. Users can also access a detailed privacy statement explaining the data protection and confidentiality measures in place.
Responsibilities and Compliance
CAVCO and CRA play crucial roles in administering the PSTC. CAVCO is responsible for initially certifying productions as accredited and conducting compliance reviews where necessary. The CRA's role includes reviewing tax credit claims, ensuring ongoing eligibility, and handling any audits required to verify compliance.
Potential Denials and Revocations
An Accreditation Certificate can be revoked if CAVCO, upon review, finds that an omission or incorrect statement was made in the application, or if the production does not meet the eligibility criteria. In such cases, any tax credits already received must be repaid. The process involves notifying the applicant, providing a period for additional information submission, and making a final decision based on the complete evaluation.
Fees and Documentation
Applicants are required to pay a fee for each application and submit various supporting documents, including:
- Chain of title documentation or a detailed legal opinion confirming copyright ownership.
- A summary of the locked budget or final cost report.
- An official designee affidavit, where applicable.
Conclusion
The Film or Video Production Services Tax Credit (PSTC) is a pivotal program designed to foster the growth of the Canadian film and video production industry by encouraging the employment of Canadian residents. By understanding the eligibility criteria, application process, and administrative responsibilities, production companies can effectively leverage this tax credit to support their projects and contribute to the vibrant Canadian audio-visual landscape. For more details and to begin an application, visit CAVCO's website at www.canada.ca/cavco.
