Production services tax credit

The production services tax credit is a refundable corporate income tax credit for accredited production corporations that produce accredited film or video productions in British Columbia (B.C.). The credits are available to both domestic and foreign producers and there is no Canadian content requirement.

The production services tax credit program consists of four tax credits:

  • Production services tax credit
  • Regional production services tax credit
  • Distant location production services tax credit
  • Digital animation, visual effects and post-production (DAVE) services tax credit

Applying for a certificate

Before you can claim the credits, you must obtain an accreditation certificate from Creative BC. This includes:

  1. Filing a pre-certification form with Creative BC within 120 days of incurring your first accredited B.C. labour expenditure for a production
    • It's important to file the pre-certification form within the right time frame to avoid reduced or denied claims. Learn more about this deadline and recent changes
  2. Applying for an accreditation certificate with Creative BC
    • We strongly recommend you submit your accreditation certificate application to Creative BC within 12 months of your corporation’s taxation year end
    • For applications submitted later, Creative BC cannot guarantee it will be processed in time for you to file with the Canada Revenue Agency (CRA) before the deadline, which may result in denied claims

Recent legislative changes

  • Budget 2022 extended the deadline to file a pre-certification form from 60 to 120 days effective February 22, 2022. This impacts productions that first incur accredited B.C. labour expenditures (ABCLE) on or after February 22, 2022
  • As previously announced, Budget 2023 proposes the following legislative measures for production companies that first incurred an ABCLE between July 1, 2020 and February 21, 2022
    • Under the current rules you have 60 days to file a pre-certification form
    • The new proposed measures will allow you to claim ABCLE incurred up to 120 days prior to the pre-certification form submission date, regardless of how late the pre-certification form was filed
    • However, you will be unable to claim ABCLE incurred more than 120 days prior to filing the pre-certification form. This may reduce the production services tax credit available to you
    • In advance of these proposed legislative measures being passed by the Legislature and receiving royal assent, the CRA is administering the production services tax credit using these new rules

Claiming the credits

You can claim the credit(s) by:

  1. Completing the British Columbia Production Services Tax Credit (T1197) form
  2. Attaching the accreditation certificate you receive from Creative BC
  3. Submitting it with your T2 Corporation Income Tax Return

A separate T1197 form and accreditation certificate is required for each production. Enter the total amount of credits from all productions you're claiming on line 672 on Schedule 5, Tax Calculation Supplementary - Corporations.

For tax years beginning before February 19, 2020, you must claim the credit no later than 36 months after the end of your corporation’s tax year. For tax years beginning on or after February 19, 2020, you must claim the credit no later than 18 months after the end of your corporation’s tax year.

The deadline to claim this tax credit for claims required to be made between March 13, 2020 and December 30, 2020 was extended to six months from the original due date or to December 31, 2020, whichever was earlier.

The credit is fully refundable, but must first be applied against total income tax payable. There are no carry-back or carry-forward provisions.

Legislation

The following legislation applies to the production services tax credit program: