Ontario Computer Animation and Special Effects Tax Credit
ON, Canada
Tax credit for animation and special effects work in Ontario
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
- Government of Ontario
- Ontario Creates
grant_single|status
grant_card_status|open
grant_single_labels|preview
Refundable tax credit of 18% on local Ontario labour costs related to the creation of computer animation and special effects for use in film and television.
grant_single_labels|projects
This tax credit is specifically for corporations that are situated and operate within Ontario. Its aim is to support companies contributing to the region's computer animation and special effects industry.
- Companies with a permanent establishment in Ontario.
- Corporations filing an Ontario corporate tax return.
grant_single|admissibleProjectsExample
$18,000
Special effects creation for an indie film focusing on historical events
$9,900
Development of virtual reality environments for an educational platform
$13,500
Design and animation of ecological documentaries with advanced graphics
$18,000
Development of high-quality visual effects for an upcoming TV series
$16,200
Creation of motion capture animations for a video game
$13,500
Creation of 3D character models for an animated feature film
grant_single_labels|admissibility
Eligibility for the Ontario Computer Animation & Special Effects Tax Credit (OCASE) is determined by specific criteria related to the corporation's characteristics and activities.
- The corporation must be a Canadian corporation with a permanent establishment in Ontario.
- It can be Canadian or foreign-owned.
- The corporation must file an Ontario corporate tax return.
- Qualifying corporations may include animation or visual effects houses, post-production houses, and film and television production companies.
- The corporation must perform eligible computer animation and special effects activities carried out in Ontario.
grant_eligibility_criteria|who_can_apply
The Ontario Computer Animation & Special Effects Tax Credit (OCASE) is available to Canadian corporations, regardless of whether they are Canadian or foreign-owned, that have a permanent establishment in Ontario and file an Ontario corporate tax return. Eligible applicants include animation companies, visual effects houses, post-production companies, and production companies that perform eligible computer animation and special effects activities within the province. Additionally, service providers operating under contract to the production’s producer for digital animation or visual effects are also eligible to apply. Multiple companies on a single production may apply if they each perform eligible digital animation or visual effects activities. Furthermore, any freelancers hired by the applicant corporation must be Ontario residents, and their labour expenditures must meet a minimum threshold to qualify for the tax credit.
grant_eligibility_criteria|who_cannot_apply
This tax credit imposes restrictions on certain types of productions, essentially excluding them from eligibility based on their genre or purpose. The aim is to focus the tax credit support on productions with significant cultural or economic impact.
- Productions in news, current events, or public affairs programming.
- Talk shows and programs with weather or market reports.
- Productions focused on games, questionnaires, or contests (except those directed primarily at minors).
- Sports events or activities.
- Gala presentations or awards shows.
- Productions that solicit funds.
- Reality television.
- Pornography.
- Advertising-related productions.
- Productions made primarily for industrial, corporate, or institutional purposes.
- Documentaries mostly composed of stock footage.
- Instructional, educational, or tutorial productions in certain cases.
- Music videos and productions associated with esports, gaming, or gambling.
- Production types like prank videos, vlogs, or user-generated content.
grant_eligibility_criteria|eligible_expenses
The Ontario Computer Animation & Special Effects Tax Credit (OCASE) supports projects engaging in eligible computer animation and special effects activities directly connected to eligible productions. These activities leverage digital technologies to create visual effects and animations for various media formats.
- Designing, modelling, rendering, and lighting for computer animation and special effects.
- Painting, animating, and compositing using digital technologies.
- Productions made for commercial exploitation through theatrical distribution, television broadcasts, or alternative online means.
- Productions that incur a minimum of $25,000 in Ontario labour expenditures for animation or visual effects activities.
- Activities supporting non-interactive audiovisual content that form part of single or multi-episode productions.
grant_eligibility_criteria|zone
The tax credit is based on specific eligible labour expenditures directly related to computer animation and special effects activities in Ontario.
- Salaries and wages paid to employees directly attributed to eligible activities.
- Payments to freelancers who are individuals, partnerships, or arm’s-length incorporated individuals working on eligible activities.
grant_single_labels|criteria
- The OCASE Tax Credit is based on eligible Ontario labour expenditures incurred by a qualifying corporation during a taxation year with respect to eligible computer animation and special effects activities. - The tax credit amount is calculated as 18% of the eligible Ontario labour expenditures incurred by the qualifying corporation. - Eligible productions must be created for commercial exploitation and have received an OFTTC or OPSTC certificate to be eligible for the OCASE tax credit. - Eligible activities include designing, modelling, rendering, lighting, painting, animating, and compositing directly in support of eligible animation or visual effects. - Qualifying labour expenditures include salaries, wages, and payments to freelancers for eligible activities carried out in Ontario. - The OCASE Tax Credit is administered jointly by Ontario Creates and the Canada Revenue Agency. - Application for the Certificate of Eligibility is made to Ontario Creates, which is then filed with the Canada Revenue Agency for claiming the tax credit. - Residency status is important in determining eligible labour expenditures for the tax credit. - Assistance in the form of grants, subsidies, and forgivable loans may grind the tax credit amount. - Crowdfunding may be considered assistance depending on the model used. - If a product/production is found to be ineligible, the applicant may be required to withdraw it from review. - Applicants can appeal the amount of tax credit received through the CRA's objections and appeals process. - For more information or assistance, applicants can contact the tax credit department at Ontario Creates.
grant_single_labels|register
Here are the steps to apply for the Ontario Computer Animation & Special Effects Tax Credit:
- Step 1: Verify Eligibility
- Ensure your corporation is incorporated in Canada and has a permanent establishment in Ontario.
- Verify your activities relate to eligible computer animation or special effects for eligible productions.
- Step 2: Fiscal Year-End Preparation
- Complete all eligible activities for the fiscal year.
- Collect detailed records of eligible labour expenditures paid to Ontario residents.
- Step 3: Application Preparation
- Gather and prepare financial statements, detailed labour schedules, and any necessary supporting documents.
- Ensure you have a Certificate of Eligibility from Ontario Creates, if applicable.
- Step 4: Submit Application to Ontario Creates
- Complete the OCASE application form available from Ontario Creates.
- Submit the application via Ontario Creates’ guidelines including all necessary documentation and fees.
- Step 5: Filing with the Canada Revenue Agency
- File your corporate tax return with the CRA including the Certificate of Eligibility and other required documentation.
- Use the T2 attach-a-doc feature or My Business Account to submit documents electronically.
- Step 6: Receive and Confirm Credit
- Obtain confirmation and the refunded tax credit from CRA if eligible.
- Record and confirm all correspondence and financial transactions related to the tax credit.
grant_single_labels|otherInfo
Here are additional relevant details for this grant:
- The OCASE tax credit is calculated at 18% of eligible Ontario labour expenditures, with no cap on the amount of eligible expenditures.
- Applicants must have a permanent establishment in Ontario and file an Ontario corporate tax return.
- The OCASE tax credit can be claimed in addition to the Ontario Film and Television Tax Credit (OFTTC) or the Ontario Production Services Tax Credit (OPSTC).
- The tax credit is jointly administered by Ontario Creates and the Canada Revenue Agency, requiring a Certificate of Eligibility from Ontario Creates.
- Eligible productions must be produced for commercial exploitation through theatrical distribution, television broadcast, or alternative means.
- Pandemic-related expenses and liabilities, such as PPE costs and remote work by eligible employees, have specific considerations under the tax credit rules.
- A minimum of $25,000 in eligible Ontario labour expenditures per production is required for activities commencing on or after March 26, 2024.
- There is a $100 additional filing fee for applications submitted more than 24 months after the fiscal year-end of the claim.
- The tax credit cannot be claimed for productions primarily comprised of ineligible genres such as news, talk shows, sports events, and reality TV.
- There is an administration fee calculated as 0.15% of eligible expenditures, with a minimum fee of $500 and a maximum fee of $10,000.
- Privileges such as appeals against ineligibility determinations are limited, focusing instead on judicial review options.
- Special provisions apply for digital effects in live-action productions, detailing eligible roles and labor conditions.
Apply to this program
Your Gateway to Ontario’s Animation and Special Effects Tax Relief
The Ontario Computer Animation & Special Effects Tax Credit (OCASE) provides a refundable tax credit to qualifying corporations for eligible labour expenditures in the region. This initiative promotes growth in the digital production sector by encouraging creative companies to engage in animation and visual effects activities within Ontario.
Understanding the Ontario Computer Animation & Special Effects Tax Credit
The OCASE tax credit is a crucial financial incentive for the computer animation and special effects industry in Ontario, reflecting the province's commitment to nurturing creative talent and supporting economic growth in the digital arts sector. Offering a rebate of 18% on eligible labour expenditures, the credit is designed to alleviate financial pressures on production companies, enabling them to allocate resources more effectively towards creative development and technological innovation.
Eligibility for the OCASE tax credit extends to various Canadian corporations, including both foreign and domestically owned firms that maintain a permanent establishment in Ontario. These corporations must be engaged in producing content intended for commercial exploitation, a necessary stipulation that ensures the credit supports projects with tangible market impacts. Importantly, eligible productions can include a wide range of commercial works, provided they do not fall under excluded genres which are comprehensively outlined in the program’s guidelines.
One of the major advantages of the OCASE tax credit is its flexibility in conjunction with other related tax credits, such as the Ontario Film and Television Tax Credit (OFTTC) and the Ontario Production Services Tax Credit (OPSTC). This adaptability allows companies to maximize their financial support, reducing overall project costs significantly when multiple credits are leveraged simultaneously. Moreover, with no upper limit on the eligible labour expenditures, companies can fully exploit the credit to its potential, which is particularly beneficial for large-scale and long-term projects.
The activities considered eligible under the OCASE program encompass a wide array of computer animation and special effects processes. From designing and modeling to rendering and composting, these activities are integral to the creation of high-quality visual content. However, it is essential for companies to differentiate between eligible and non-eligible activities, such as general in-camera effects and promotional materials, to ensure compliance with the program requirements.
Obtaining the OCASE tax credit involves a detailed application process, jointly managed by Ontario Creates and the Canada Revenue Agency. Companies are required to submit applications with comprehensive documentation of their expenditures to obtain a Certificate of Eligibility. This certificate is critical for claiming the tax credit on their corporate tax returns, highlighting the importance of maintaining meticulous records throughout the production phases.
With recent legislative reforms, the OCASE tax credit has been simplified to further untether it from the other film and television tax credits, targeting it more directly towards productions with substantial cultural or economic contributions. This has streamlined the application process making it less cumbersome and more straightforward for companies to obtain much-needed financial support.
The OCASE tax credit program represents an invaluable opportunity for companies looking to invest in Ontario’s vibrant digital media landscape. By alleviating labour costs, the credit empowers companies to enhance their competitive edge in the film and television industry, fostering a thriving ecosystem that attracts top talent and innovative projects to Ontario.
For companies dedicated to pushing creative boundaries, the OCASE tax credit not only offers economic relief but also positions Ontario as a leading destination in global media production.
