Ontario Interactive Digital Media Tax Credit
ON, Canada
Tax credit for interactive digital media creation in Ontario
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
- grant_single|grantStatusClosed
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Information and cultural industries
- Educational services
- 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 35 to 40% of eligible labour, marketing and distribution expenditures related to the creation of interactive digital media products in Ontario.
grant_single_labels|projects
This grant is specifically available to corporations that have a permanent establishment in Ontario, Canada. This requirement ensures that the benefits of the tax credit support the regional economic development and digital media industry within Ontario.
- Organizations operating with a permanent establishment in Ontario, Canada.
grant_single|admissibleProjectsExample
$35,000
Develop an educational mobile application teaching kids algebra through interactive and engaging games
$52,500
Develop an e-learning platform for children under 12 focused on science and technology education
$26,250
Creation of a mobile app with interactive stories to improve literacy in children under 12
$45,500
Development of an interactive digital media product to teach children under 12 conversational languages
$52,500
Develop an interactive digital game to teach children under 12 about Canadian history
$31,500
Creation of a digital game to educate children under 12 about environmental sustainability
grant_single_labels|admissibility
Eligibility for the Ontario Interactive Digital Media Tax Credit (OIDMTC) is determined by specific requirements related to the corporation's establishment, type, and activities.
- The corporation must be a Canadian corporation, which can be either Canadian or foreign-owned.
- The corporation must have a permanent establishment in Ontario where it develops the eligible product.
- The corporation must file an Ontario tax return.
- The corporation cannot be a labour-sponsored venture capital corporation as per the regulations under the Income Tax Act (Canada).
- The corporation must not be exempt from taxes or controlled directly or indirectly by a corporation that is exempt from taxes.
grant_eligibility_criteria|who_can_apply
A qualifying corporation is a Canadian corporation, either Canadian or foreign-owned, which develops an eligible product at a permanent establishment in Ontario operated by it. These corporations must file an Ontario tax return to be eligible. However, corporations that are prescribed labour-sponsored venture capital corporations under the Income Tax Act (Canada) regulations and corporations that are exempt from tax or controlled directly or indirectly by a corporation exempt from tax are not eligible for the OIDMTC.
grant_eligibility_criteria|who_cannot_apply
This tax credit excludes specific types of corporations based on their tax status and the primary purpose of their products. Restrictions ensure eligibility aligns with the program's objectives to support interactive digital media development.
- Corporations that are prescribed labour-sponsored venture capital corporations.
- Corporations that are exempt from tax or controlled directly or indirectly by a tax-exempt corporation.
- Products that serve primarily industrial, corporate, or institutional purposes.
- Products that are primarily a reference material or designed for information retrieval.
- Products focused on news, current events, public affairs, or weather and market reports.
- Social networking sites primarily used for interpersonal communication.
- Products that offer opinion, commentary, or advice as their main function.
- Sites aggregating internet content or functioning as a search engine.
- Content primarily promotional or for advertising purposes.
- Websites embedded in third-party sites that don't qualify as complete independent products.
grant_eligibility_criteria|eligible_expenses
The Ontario Interactive Digital Media Tax Credit (OIDMTC) encourages the development of interactive digital media products in Ontario. Eligible activities focus on creating and marketing digital media products for educational and entertainment purposes.
- Development of non-specified digital products intended for sale or licensing.
- Creation of specified digital products under fee-for-service agreements.
- Development of eligible digital games by qualifying or specialized digital game corporations.
- Production of mobile applications aimed at children under 12.
- Design and distribution of e-learning products for educational purposes.
- Marketing and distribution expenses associated with non-specified products.
grant_eligibility_criteria|zone
For the Ontario Interactive Digital Media Tax Credit, eligible expenses include specific labour, marketing, and distribution costs that are directly related to the creation of interactive digital media products.
- Eligible Ontario labour expenditures including salaries and wages for employees directly involved in product development.
- Remuneration paid to arm’s length individuals or entities who are not employees for services directly related to product development.
- Up to $100,000 for marketing and distribution expenses related to non-specified products, incurred within the allowable period before and after product completion.
grant_single_labels|criteria
There are evaluation and selection criteria for this grant. The evaluation and selection criteria include:
- Qualifying as a Canadian corporation with a permanent establishment in Ontario
- Developing eligible interactive digital media products
- Meeting the 80/25 rule based on labour costs
- Possessing eligible marketing and distribution expenses for non-specified products
grant_single_labels|register
Here are the steps to submit an application for the Ontario Interactive Digital Media Tax Credit (OIDMTC):
- Step 1: Determine Eligibility
- Ensure that your corporation qualifies as per the eligibility criteria, including being a Canadian corporation with a permanent establishment in Ontario.
- Ensure that the product type qualifies under the OIDMTC, such as digital games or mobile applications.
- Step 2: Prepare Documentation
- Compile detailed records of eligible expenditures, including Ontario labour costs and, if applicable, marketing and distribution costs.
- Ensure documentation supports the 80/25 rule for eligible wages.
- Step 3: Complete Application Forms
- Obtain and carefully fill out the OIDMTC application forms available from Ontario Creates.
- Use the appropriate expenditure breakdown templates available on the Ontario Creates website.
- Step 4: Submit to Ontario Creates
- Submit your completed application to Ontario Creates to obtain a Certificate of Eligibility.
- Make sure to apply within 18 months of the end of the taxation year in which your product's development was completed.
- Step 5: Submit to Canada Revenue Agency
- File your tax return with the Canada Revenue Agency, including your OIDMTC amount on the T2SCH560 schedule.
- Once received, submit the Certificate of Eligibility to the CRA to claim your tax credit.
- Step 6: Follow-up
- Monitor correspondence from Ontario Creates and CRA for any requests for additional information or documentation.
- Respond to any inquiries promptly to facilitate the processing of your application.
Apply to this program
Understanding the Ontario Interactive Digital Media Tax Credit (OIDMTC)
The Ontario Interactive Digital Media Tax Credit (OIDMTC) offers a refundable tax credit to qualifying corporations, aimed at stimulating the development and distribution of interactive digital media products in Ontario. It provides a financial incentive through a percentage-based refund on eligible expenditures related to labour and specific marketing activities to boost innovation in digital media sectors.
In-Depth Exploration of the OIDMTC and Its Advantages
The Ontario Interactive Digital Media Tax Credit (OIDMTC) serves as a catalyst for growth in the digital media landscape by providing substantial financial relief to qualifying corporations involved in the creation and dissemination of interactive digital media products. By offering a 40% tax credit on eligible Ontario labour and marketing expenses for non-specified products and a 35% credit for specified products, the program aims to bolster the competitiveness of Ontario-based enterprises in the digital sphere. This tax credit is instrumental in reducing the financial barriers companies face when developing new and innovative digital products, such as mobile applications, educational tools for children, or digital games, thereby fostering a robust environment for digital innovation and cultural enrichment in Ontario.
The OIDMTC is particularly advantageous for corporations looking to establish or expand their operations in Ontario. Its broad eligibility requirements ensure that a wide range of companies, whether Canadian or foreign-owned, can benefit from this tax incentive, provided they maintain a permanent establishment in Ontario. This inclusivity encourages diversity and innovation among applicants, allowing smaller enterprises and startups to access benefits that would otherwise be unattainable.
Additionally, large digital game corporations can significantly benefit from the OIDMTC. By incurring at least $1 million in eligible labour expenditures over a three-year period, these corporations become eligible for the tax credit without the need to adhere to the 80/25 labour cost rule that otherwise applies. This flexibility is crucial for large-scale operations that involve complex development processes and significant investments in human resources.
The breadth of the OIDMTC is not just limited to labour costs; it also acknowledges the importance of adequate marketing and distribution efforts. For non-specified products, corporations can claim marketing and distribution expenses up to $100,000, recognizing the role of these activities in bringing products to market and ensuring their commercial success. This aspect promotes both the creation and sustainable commercialization of digital media products, allowing corporations to strategically plan their product launches and tap into lucrative markets.
By involving both Ontario Creates and the Canada Revenue Agency in its administration, the OIDMTC ensures a streamlined and efficient process for applicants. The dual administrative oversight provides a thorough review mechanism, thus maintaining integrity and accountability throughout the application and approval process. Such structured governance not only facilitates timely disbursement of credits but also builds trust among applicants regarding the transparency and reliability of the program.
In conclusion, the Ontario Interactive Digital Media Tax Credit is a pivotal resource for companies seeking to innovate and thrive in the digital media sector. By alleviating financial burdens associated with development and commercialization, the OIDMTC supports the growth of a diverse range of interactive media products. This not only boosts Ontario’s digital media industry but also enhances its global stature as a hub for creative and technological advancement.
