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|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
<p>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.</p>
grant_single_labels|terms_and_conditions
The Ontario Interactive Digital Media Tax Credit (OIDMTC) offers a refundable tax credit based on eligible Ontario labour expenditures and marketing expenses to support the development of interactive digital media products. The modalities for claiming the tax credit are detailed below, dependent on the product type and associated activities.
- Refundable tax credit of 40% on eligible Ontario labour expenditures and marketing expenses for non-specified products.
- Refundable tax credit of 35% on eligible Ontario labour expenditures for specified products, qualifying digital game corporations, and specialized digital game corporations.
- There are no limits on the amount of eligible Ontario labour expenditures qualifying for the credit; however, marketing and distribution expenses are capped at $100,000 per non-specified product.
- Qualifying expenditures include both salaries and wages for employees and remuneration paid to arm’s length persons.
- Marketing and distribution expenses can be claimed only for non-specified products and only for expenses incurred within 24 months prior to and 12 months following the completion of the product.
- Eligible labour costs must be incurred within a three-year period prior to the product's completion.
- Administered by Ontario Creates in conjunction with the Canada Revenue Agency, with the credit paid out net of any Ontario taxes owed.
- Claims incorporate a 0.15% administration fee of eligible expenditures, with a minimum fee of $1,000 and a maximum of $10,000 per application.
grant_single_labels|projects
The Ontario Interactive Digital Media Tax Credit (OIDMTC) is designed to support the creation and commercialization of interactive digital media products in Ontario. This includes a range of digital media projects focusing on entertainment and educational products for children.
- Development of non-specified interactive digital media products, such as digital games, mobile applications, and e-learning products for children.
- Creation of specified products under fee-for-service arrangements in the digital media industry.
- Production of eligible digital games by qualifying digital game corporations with substantial labour expenditure.
- Development of specialized digital games by corporations with high Ontario payroll or annual revenue related to game development.
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
This tax credit is available to qualifying corporations that operate from a permanent establishment in Ontario. The program targets Ontario-based digital media companies to support local economic development.
- Business operations must be located in Ontario.
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.
grant_single_labels|otherInfo
Here are additional relevant details for this grant:
- The Ontario Interactive Digital Media Tax Credit (OIDMTC) can be combined with other tax credits, such as the Scientific Research & Experimental Development (SR&ED), provided the activities are distinct and properly documented.
- The application must include full disclosure of all developmental labor expenditures, even if not included in the OIDMTC claim, except for claims under specialized digital game corporations or qualifying digital game corporations.
- Upon filing, corporations are not required to wait for the Certificate of Eligibility to submit their corporate tax return but must provide an estimate of the OIDMTC amount.
- No preliminary assessments on product eligibility are offered by Ontario Creates, but applicants can consult them before submission.
- The administrative fee for processing the tax credit application is 0.15% of eligible expenditures, with a minimum fee of $1,000 and a maximum of $10,000.
- The CRA applies a "look-through approach" to remuneration, limiting qualifying labour expenditures to amounts it would pay directly to employees.
