Film & Video Industry
Are you eligible for the Canadian Film or Video Production Tax Credit Program (CPTC)?
To qualify for the Canadian Film or Video Production Tax Credit (CPTC) program, the applicant must be a qualified corporation that carries on through a permanent establishment in Canada a business that is primarily a Canadian film or video production business. Specifically excluded are prescribed labour-sponsored venture capital corporations, tax-exempt corporations and corporations controlled by one or more tax-exempt persons. In addition, the qualified corporation or a prescribed taxable Canadian corporation that is related to the qualified corporation must own the copyright in the film for which a claim is being made.
A qualified corporation can receive the CPTC at the rate of 25% of qualified labour expenditure incurred for the production of a Canadian film or video production. The qualified labour expenditure may not exceed 60% of the cost of production at the end of the year net of assistance. The tax credit is therefore limited to 15% of the cost of production net of assistance.
Step- 1 Apply for a Tax Credit Certificate
The objective of the CPTC is to encourage Canadian programming and to develop an active domestic production sector. This fully refundable tax credit is available at a rate of 25 percent of the qualified labour expenditure of an eligible production. The CPTC is jointly administered by the Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency.
Step- 2 Completing CRA form T2029 – “Waiver in respect of the normal reassessment period”
Completed T2029 forms must be filed with the CRA by the end of the normal reassessment period for both the first and second taxation years ending after the production’s principal photography began, or before the 42-month CPTC application deadline, whichever comes first.
Step- 3 Claiming Tax Credits
The federal government provides income tax incentives to encourage businesses to produce films and videos in Canada. To establish whether their expenditures qualify for federal tax credits, businesses have to file tax credit claims with their T2 Corporation Income Tax Returns.
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