Tax Credit Reform: What you need to know about OIDMTC

By: BeneFACT Marketing in CRA Updates

May 5th, 2015

hand press play button sign to start or initiate projects as conOn April 23, 2015, Finance Minister Charles Sousa announced the Ontario budget, which, along with beer and transit reform, is outlining new rules for the Ontario Interactive Digital Media Tax Credit (OIDMTC). The proposed changes focus on overhauling the program’s primary purpose test and 90 per cent rule.

OIDMTC, introduced in 1998, is a program that allows companies to claim labour, marketing and distribution expenditures for eligible interactive digital media products. It was announced last fall that the program was under review, as it had grown from $2.85 million of tax credits in 2005-06 to $68.26 million in 2013-14. Meanwhile, wait times to receive the certificate of eligibility from the Ontario Media Development Corporation (OMDC) have increased to over 59 weeks in many cases.

Since that announcement, the industry has been buzzing with talk of what changes should be expected. Interactive Ontario held a townhall discussion in February in an effort to mobilize the Interactive Digital Media (IDM) community and discourage the government from making changes that would encroach on gains the industry has made in recent years. After all, the credit has contributed to turning digital media into a $1 billion industry in Ontario and has encouraged big digital gaming companies like Ubisoft and EA to establish studios in the province.

There are three main changes to the OIDMTC program that were announced on April 23rd that companies who are looking to take advantage of the tax credit should be aware of:

The changes are focused on decreasing wait times and excluding so-called “outlier” companies who had previously taken advantage of the credit. Interactive Ontario has applauded the Ontario government for preserving its support of legitimate IDM.

“The changes to the OIDMTC in today’s budget will ensure core Ontario IDM companies can continue to invest, hire more young people, and make Ontario a centre for innovation that can compete on the world stage,” Christa Dickenson, Executive Director of Interactive Ontario, said in a statement last week.

All over Canada, provinces are focused on strengthening and sustaining the IDM industry. At BeneFACT, we have a dedicated team who can help provide you with information to see if your company is eligible for these tax credits. To learn more about digital media tax credits in your provinces, call us toll free at 1-855-TAX-BACK (829-2225).