Ontario Computer Animation And Special Effects Tax Credit
What Is It?
The OCASE Tax Credit is a refundable tax credit which means that the credit will be refunded to the qualifying corporation, net of any Ontario taxes payable by the qualifying corporation. The OCASE Tax Credit is based upon eligible Ontario labour expenditures incurred by a qualifying corporation during a taxation year with respect to eligible computer animation and special effects activities.
The OCASE Tax Credit may be claimed on eligible expenditures in addition to the Ontario Film and Television Tax Credit or the Ontario Production Services Tax Credit.
How Much Is The Tax Credit?
The OCASE Tax Credit is calculated as 20% of the eligible Ontario labour expenditures incurred by a qualifying corporation with respect to eligible computer animation and special effects activities. There is no cap on eligible Ontario labour expenditures incurred after May 11, 2005. Eligible Ontario labour expenditures incurred prior to May 12, 2005 cannot exceed 48% of the cost of eligible activities net of government assistance.
Who Is Eligible?
A qualifying corporation is a Canadian corporation that is Canadian or foreign-owned, has a permanent establishment in Ontario and files an Ontario corporate tax return. Qualifying corporations may include animation or visual effects houses, post-production houses and film and television production companies which perform eligible computer animation and special effects activities.
What Types of Production Are Eligible?
Eligible productions are productions produced for commercial exploitation which are not in an excluded genre or productions for which financial support would be contrary to public policy.
What Activities Are Eligible?
Eligible computer animation and special effects activities are activities carried out in Ontario directly in support of the production of eligible animation or visual effects for use in eligible productions.
Eligible animation or visual effects means animation or visual effects created with digital technologies but does not include:
- audio effects
- in-camera effects credit rolls, subtitles
- animation or visual effects all or substantially all of which are created by editing activities, or
- animation or visual effects for use in promotional material for the eligible production
Eligible computer animation and special effects activities include designing, modelling, rendering, lighting, painting, animating and compositing but do not include activities that are scientific research and experimental development.
What Expenditures Are Eligible?
Qualifying labour expenditures are
a) 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;
b) 50% of remuneration paid to freelancers who are individuals or partnerships for qualifying expenditures incurred before March 26, 2009; and
c) 100% of remuneration paid to freelancers who are individuals, partnerships, or arm’s-length incorporated individuals, for qualifying expenditures incurred after March 26, 2009.*
The labour expenditures must be incurred in the taxation year for which they are being claimed and paid in the taxation year or within 60 days after the end of the taxation year.
* As announced in the Provincial Budget of March 26, 2009
How Is The Credit Administered?
The OCASE Tax Credit is jointly administered by the Ontario Media Development Corporation (OMDC) – an agency of the Ontario Ministry of Culture. Application is made to the OMDC for a Certificate of Eligibility for the taxation year which the corporation files with the Canada Revenue Agency together with its tax return in order to claim the OCASE Tax Credit. The amount of the credit, net of any Ontario taxes owing will be paid to the qualifying corporation. If the qualifying corporation does not owe any taxes the full amount will be paid out.
PLEASE NOTE: CANADA REVENUE AGENCY (CRA) WILL ADMINISTER BOTH FEDERAL AND ONTARIO CORPORATE TAXES FOR TAXATION YEARS ENDING AFTER DECEMBER 31, 2008. PLEASE BE ADVISED THAT AS OF JANUARY 1ST 2009, THE CRA HAS BECOME THE FIRST POINT OF CONTACT FOR ALL CORPORATE TAX ENQUIRIES. (1 800 959-5525)
Related Documents:
- OCASE Information/Application Package
- OCASE Tax Credit Legislation; OCASE Regulations
Download the OCASE Tax Credit Guidelines
Download Ontario Declaration of Residency/Consent Form
Download the Taxpayer Authorization Form
For further information contact:
Tax Credits & Financing Programs
Ontario Media Development Corporation
Fax: 416.314.6876
E-mail: taxcredits@omdc.on.ca
Note: This sheet is a general guide and may not be relied upon in order to determine eligibility or the amount of an anticipated credit. Please consult the OCASE Tax Credit legislation and regulation for further details.
