In our last blog about digital media tax credits, we showcased the rich funding opportunities available for companies operating in Ontario. This week, Quebec takes the spotlight as a vibrant cluster of activity in Canada’s Interactive Digital Media (IDM) industry.
Montreal and Quebec City have long been known for producing some of Canada’s most talented and promising creative talents, and it was only a matter of time for Quebec to become a hot spot for innovative and creative companies. It was nearly two decades ago that the Quebec government decided to support these companies with tax incentives, including the introduction of the Production of Multimedia Titles Tax Credit.
“Lawmakers chose long ago to bet on video game development with the belief it would generate well-paying creative jobs and help compensate for the declining manufacturing and textile sectors,” says one Financial Post article from 2012.
Since then, video game publishers like Ubisoft Entertainment SA and Eidos have developed a presence in the province, thanks in large part to this tax credit.
The credit allows companies to claim up to 30 per cent of qualified labour expenditures for commercialized products. Unlike Ontario, there aren’t specific limitations on content, although promotional products are restricted and the product must present information using text, images or sound. There is also a premium of 7.5 per cent offered on top of the regular tax rate for companies that produce a French language version of their products.
Companies should be aware that there is an 18-month deadline from your fiscal year end in which expenditures were incurred to submit a claim to Revenu Quebec, and you must first apply to Investissement Quebec to have your eligibility and expenditures certified. The Initial Eligibility Certificate provides details of your company and projects being claimed, which you can submit when work is complete or while it’s in progress. The Production Work Certificate details your expenditures incurred during the whole project, and you can only submit it after the end of your fiscal year. The 18-month deadline means you should really be claiming on an annual basis, but on the upside, you can claim expenditures for the entire lifecycle of the product. To make sure you receive the certificate in time to submit it to Revenu Quebec, it’s important to apply as soon as possible, although we don’t see the same wait times for Investissement Quebec as we do for certification from the Ontario Media Development Corporation in Ontario.
All over Canada, provinces are focused on strengthening and sustaining the IDM industry. At BeneFACT, we have a dedicated team who can help you apply for provincial digital media tax credits. To learn more about credits available in your province, call us toll free at 1-855-TAX-BACK (829-2225).