Film and television tax credit frequently asked questions
The following will help answer your questions about the film and television tax credit (FTTC).
Can a FTTC be claimed if a production services tax credit is claimed for the same production?
No, only one or the other may be claimed for a single production. Please see the Production Services Tax Credit for more information.
What does “from the final script stage” mean in the definition of B.C. labour expenditure?
“From the final script stage” means after the final script has been completed. This is often referred to as the “white draft” of the script. For the BC Film and Television Tax Credit the eligible stages of production are those stages after the end of the final script stage to the end of the post-production stage.
When should I apply for an eligibility certificate?
Creative BC may require 6 months to process certificate applications.
We strongly encourage you to apply for an eligibility certificate as early as possible in the pre-production or production stage. This allows time to correct any items that may otherwise result in a production being ineligible prior to the start of the production.
For applications submitted later than 12 months after the end of the tax year in which principal photography began, Creative BC cannot guarantee it will be processed in time for you to file your claim with the CRA before the 18-month filing deadline, which may result in denied claims.
For tax years beginning on or after February 19, 2020, you must submit the certificate(s) with your claim to CRA no later than 18 months after the end of your corporation’s tax year. For tax years beginning before February 19, 2020, you must submit the certificate(s) with your claim to CRA no later than 36 months after the end of your corporation’s tax year.
When should I apply for a completion certificate?
You should apply for a completion certificate as soon as the production is completed. If your production is completed during a tax year, Creative BC recommends you submit your completion certificate application at least 6 months before your CRA filing deadline for the tax year. This allows time for the completion certificate to be issued before the filing deadline. You must submit the completion certificate to CRA with your T1196 before the filing deadline for the tax year your production is completed.
For applications submitted later, Creative BC cannot guarantee the completion certificate application will be processed in time for you to file with the CRA before the filing deadline, which may result in denied claims.
For tax years beginning on or after February 19, 2020, the CRA filing deadline is 18 months after the end of your corporation’s tax year. For tax years beginning before February 19, 2020, the CRA filing deadline is 36 months after the end of your corporation’s tax year.
For multi-year productions, the completion certificate must be issued by Creative BC within 30 months from the end of the corporation's tax year in which principal photography began. Please note this deadline may be earlier than the CRA filing deadline for the tax year in which the production is completed. If the completion certificate is not issued within this time frame, the eligibility certificate will be revoked. If the eligibility certificate is revoked, the production corporation is not entitled to the FTTC and must repay any FTTC received for that production.
If your production starts principal photography on May 1, 2021, and is completed on October 31, 2021, and your tax year ends on March 31, 2022, your CRA filing deadline for the tax year will be September 30, 2023.
It is strongly recommended that you submit your completion certificate application to Creative BC on or before March 31, 2023. In this example, you have 18 months after the end of the tax year that principal photography started to receive your completion certificate.
If your production starts principal photography on May 1, 2019, and is completed on October 31, 2021, and your tax year end (TYE) is March 31. Your CRA filing deadlines and certificate requirements are as follows:
- March 31, 2020 TYE – CRA filing deadline is March 31, 2023 (eligibility certificate required to process claim)
- March 31, 2021 TYE – CRA filing deadline is September 30, 2022 (eligibility certificate required to process claim)
- March 31, 2022 TYE – CRA filing deadline is September 30, 2023 (completion certificate must be issued by September 30, 2022 and is required to process claim)
In this example, the completion certificate must be issued by September 30, 2022, which is 30 months after the end of the tax year that principal photography started. It is strongly recommended that you submit your completion certificate application to Creative BC on or before March 31, 2022.
Who administers the FTTC?
Creative BC processes the applications for eligibility and completion certificates.
The Canada Revenue Agency (CRA) reviews and audits claims and issues refund cheques where appropriate. If a corporation disagrees with the amount of credits assessed by the CRA, a Notice of Objection should be filed with the CRA within 90 days of the date of the Notice of Assessment.
For more information concerning eligibility, applications and certificates, please contact Creative BC at:
- Telephone: 604-736-7997
- Fax: 604-736-7290
What does the change in the definition of B.C.–based individual mean?
The definition of B.C.–based individual has been changed for productions with principal photography beginning after February 19, 2008. This change may now permit individuals who were not resident of B.C. in the year prior to the start of principal photography to still have their salary and wages eligible for the film and television tax credits. The revised definition is based on the individual's residency on December 31st of the year preceding the end of the tax year for which a tax credit is being claimed.
Production corporations are still required to gather documentation to support the residency of an individual whose labour is being claimed. In cases where the production is completed in one calendar year and the tax year end falls in the following calendar year, production corporations are not required to gather information from individuals who may no longer be employed with them. Supporting information provided at the start of the production is acceptable in these cases, provided that after reasonable enquiry, the production corporation has no reason to believe the residency status of the individual has changed at the end of the production or calendar year. For example, if a production corporation mails a T4 to an address outside of B.C. or assists the individual in obtaining a temporary work permit in B.C., this would suggest that the individual may be a non B.C.–based individual for the purposes of the film tax credit claim for that tax year.
Example: A production starts principal photography in April 2008 and wraps production in November 2008. The production corporation's fiscal year end is March 31, 2009. B.C.-based individual would be determined based on residency on December 31, 2008. However, as this date is after the date the production has wrapped, the corporation should obtain residency information at the start of or during the production. The corporation is not required to track residency of their employees or contractors after the completion of the production for the purposes of the B.C. film tax credit programs. In this example, the individual's residency as of December 31, 2007 would apply for existing residents of B.C. In addition, in this example, if an individual moves to B.C. in 2008 and remains a resident of B.C. as of December 31, 2008, their labour would qualify for the B.C. film tax credit programs.
The proof of residency commonly gathered will continue to qualify under the revised rules; for example, resident of B.C. on December 31st in the year prior to principal photography start date. For productions with tax years that straddle December 31st, a corporation would be looking at residency of the individuals for the calendar year prior to the fiscal year they are making their claim. This means that for multi-year productions, the individual's residency could be determined in the year prior to principal photography start date or it could be determined as of December 31st of the first or second calendar years after principal photography started. For multi-year productions, a corporation is not required to continue gathering supporting documentation on the same individuals for each calendar year if it has no reason to believe the individual's residency status has changed for any of the years.
If an individual moves to B.C. in the year, their labour would become eligible for the following fiscal year's claim. In other words, if an individual moves to B.C. in 2008, the production corporation can claim their labour for the 2009 and subsequent fiscal year claims.
Does 3D or stereoscopic filming or conversion qualify for the Digital Animation or Visual Effects (DAVE) tax credit?
3D or stereoscopic filming or conversion (3D) may be eligible for the DAVE tax credit, provided the shots are manipulated after shooting for depth perception and other visual effect properties. The wages, salaries and remuneration paid to B.C.-based individuals performing the 3D associated post-production functions may qualify as B.C. labour expenditures for the purposes of calculating the DAVE tax credit. However, only the individuals using digital technology for the 3D process will qualify for the "digital" component of the credit for the purposes of determining primarily digital. The fact that a production is made entirely using 3D processes does not make the production automatically 100% DAVE eligible. The primarily digital determination must be performed to determine the amount of DAVE eligible activities for the production.
Are estimates to complete costs permitted as a production cost?
Estimates to complete costs are not permitted as a production cost.
What interest costs are allowed for the film and television tax credits?
CRA’s Application Policy FAS 2008-02 discusses what interest expenses are included in the production cost limit for purposes of the Canadian Film and Video Production Tax Credit (CPTC). This policy also applies to the B.C. FTTC.
The cost of borrowing money (e.g. interest paid pursuant to the legal obligation and expenses such as financing and annual fees), may be capitalized and added to the capital cost of the production, provided an election is made according to subsection 21(1) of the federal Income Tax Act (federal Act). The production corporation may continue to capitalize these amounts in subsequent years according to subsection 21(3) of the federal Act.
One difference between the federal and B.C. film tax credit programs is for the purpose of the FTTC program, the unused labour expenditures can only be claimed in the subsequent year according to the definition of “B.C. labour expenditure” under section 79(1) of the British Columbia Income Tax Act (BC Act). Therefore, under the FTTC program, a production corporation can only capitalize interest expenditures in one subsequent taxation year after the production has completed and no further B.C. labour expenditures have been incurred.
What are considered allowable producer fees?
Please refer to CRA’s Application Policy FAS 2009-01 which provides detailed information on allowable producer fees for the purposes of the federal and B.C. film tax credits.
Are kit rentals considered eligible labour expenditures for the film tax credit programs?
No, the kit rental charges are not eligible labour expenditures for the film tax credit. The B.C. film tax credit programs are calculated based on labour expenditures made to B.C.-based individuals. The kit rental charges are not direct labour expenditures as they are paid for the rental of the equipment or tools and not for the individual’s labour.
However, if the kit rental is paid to an employee and is included as a taxable benefit to the employee on their T4 and the relevant source deductions have been taken, kit rentals will be allowed to be included as an eligible labour expenditure. The CRA’s Application Policy FIS 2006-01 provides further information on the inclusion of taxable benefits as labour expenditures.
If an individual is being paid as a contractor, the kit rentals are not permitted as eligible labour expenditures.
What is the scriptwriting tax credit?
The scriptwriting tax credit is a new refundable Film and Television tax credit that is 35% of eligible B.C. scriptwriting expenditure incurred by a qualifying production corporation before the end of the final script stage of a production. A qualifying production corporation must be eligible for and claim the Film and Television basic tax credit in order to claim the scriptwriting tax credit.
What expenses are eligible for the credit?
Labour expenditure (salary or wages or other remuneration paid to B.C. based scriptwriters) that are directly attributable to the development of script material of a production, and are incurred before the end of the final script stage of the production, are eligible for the credit. For greater clarity, the cost of purchasing a published or finished literary work, screenplay, script or script material is not eligible.
What is considered script material?
The definition of “script material” for the scriptwriting tax credit is the same as under the federal Canadian Film or Video Production Tax Credit in subsection 125.4(1) of the federal Income Tax Act.
When can the scriptwriting expenses for a production be incurred in order to be eligible for the credit?
The scriptwriting expenses have to be incurred before the end of the final script stage, but not earlier than the later of:
- February 21, 2018 and
- two years before the date principal photography of the production begins.
When can the credit be claimed?
You claim the credit in the taxation year in which principal photography of the production begins. It cannot be claimed in a taxation year prior to principal photography start or in any subsequent taxation years.
Is the cost of purchasing a script from a scriptwriter eligible?
No. The cost of purchasing a script is not an eligible scriptwriting expense.
Is the scriptwriting tax credit available under the Production Services Tax Credit?
No. The scriptwriting tax credit is only available for the Film and Television Tax Credit.