Ontario Computer Animation and Special Effects Tax Credit
Most television and film companies incorporate some sort of computer animation or special effects technology within their productions. Keeping up-to-date on these software programs and hardware that can run them can be costly and take financial resources away from required wage expenses.
The Ontario Media Development Corporation (OMDC) is offering a tax incentive program to help Ontario production companies with wages related to computer animation and special effects, allowing your company to free financial resources to keep your special effects cutting edge. The program is known as the Ontario Computer Animation and Special Effects (OCASE) Tax Credit and can cover 20% of eligible Ontario labour expenses related to your special effects and animation activities. The program can also be stacked with the previously mentioned Ontario Production Services Tax Credit (OPSTC).
Eligibility Factors for this Ontario Tax Credit
Corporations eligible for the OCASE Tax Credit can be either Canadian or foreign-owned, but need to have a permanent establishment within Ontario that files Ontario corporate taxes. The company can be an animation or visual effects house, post-production house, and/or film and television production company.
Eligible activities include:
- Designing
- Modelling
- Rendering
- Lighting
- Painting
- Animating
- Compositing
Activities that are not eligible under the OCASE tax incentive are audio effects, in-camera effects, credit rolls, subtitles, animation or visual effects used in promotional materials, or activities that are scientific research and experimental development.
Ontario Tax Incentive Amount
The OCASE covers 20% of eligible labour costs with no maximum amount. Eligible labour costs carried out in Ontario are split up into the following:
- Salaries and wages (i.e., amounts paid to employees) directly attributable to eligible activities carried on by the qualifying corporation, that are paid to Ontario residents (individuals resident in Ontario at the end of the previous calendar year) who report to a permanent establishment of the qualifying corporation in Ontario at which the eligible activities are carried out;
- 50% of remuneration paid to freelancers who are individuals or partnerships for qualifying expenditures incurred before March 27, 2009; and
- 100% of remuneration paid to freelancers who are individuals, partnerships, or arm’s-length incorporated individuals (such as personal services corporations), for qualifying expenditures incurred after March 26, 2009.
Apply for the Ontario Computer Animation and Special Effects Tax Credit
Interested parties should review the downloadable OCASE Tax Credit Guidelines. If you are in compliance with all outlined eligibility requirements, feel free to continue to the OMDC Online Application Portal or contact Mentor Works