Nova Scotia digital media tax credit

• Application & Expenditure Report
• Declaration of Residency Forms
• Invoices
• Statements of Eligible Remuneration
• Affidavit, Review Engagement Report or Audit Report

Who is eligible?

• Taxable Canadian corporations
• Corporations developing interactive digital media products
• Corporations with a permanent establishment in Nova Scotia

Who is not eligible

• Prescribed labour-sponsored venture capital corporations

Eligible expenses

• Eligible salaries for project employees
• Eligible remuneration for arm’s-length third-party services
• Marketing and distribution expenses, up to $100,000 per product
• Other production costs directly related to the product

Ineligible Costs and Activities

• Operating system software
• Application software such as word processing, spreadsheets, or databases
• Products mainly for interpersonal communications
• Products used mainly to advertise or promote a business or organization
• Pornographic, discriminatory, or hate-inciting products

Eligible geographic areas

• Nova Scotia
• The area of the Province consisting of all of the Province except the area that is within 30 km driving distance of Halifax City Hall in the Halifax Regional Municipality

• Applicants will be evaluated for actual costs and actual product characteristics once the product is completed.

• Submit an optional Part A application to confirm if your project is eligible for the credit.
• Submit a mandatory Part B application to apply for a Tax Credit Certificate no later than 30 months after the end of the taxation year in which expenditures for an eligible product were made.
• Submit the completed Application & Expenditure Report, and email the entire spreadsheet to the TFFRD together with a signed and dated paper copy.
• Include Declaration of Residency Forms for all employees listed in the expenditure report.
• Include invoices, Statements of Eligible Remuneration, and an Affidavit, Review Engagement Report or Audit Report.
• Include the completed Digital Media Product, chain of title documentation if needed, the Exchange of Information Form, and any additional documentation or information requested.

• The Taxation and Federal Fiscal Relations Division issues tax certificates that eligible corporations may use to claim the DMTC with their annual income tax filings.
• Tax certificates issued before a product is completed may be subject to review, revision, and in some circumstances revocation if the product is not completed, or if the costs claimed in the application are not supported by the affidavit or audit/review report submitted in the final application.
• The Minister of Finance of the Province, or a person designated by the Minister of Finance of the Province, may revoke a tax credit certificate if the eligible corporation has not complied with the Act or these regulations, or has not completed an eligible product 36 months after beginning development.
• Each applicant will be required to submit a completed copy of their product or a video of playing the product to the Department where it will be reviewed, to ensure compliance with the Act and Regulations.

• There are no administration fees required for processing DMTC applications.
• There is no restriction on the size of the corporation.
• The corporation may be controlled by foreign or Canadian owners.
• There is no requirement for the corporation to own the copyright to the product.