OK, I know that a heading with “tax” in it might turn a lot of people off, so bare with me and just focus on the “credits” part. As an independent filmmaker, it would behoove one to be aware of what financial support is available to get a film made, help with the expenses after it’s done, or even to review guidelines and criteria BEFORE you make your film. Now that’s proactive.
Although I had started the application for the Canadian Film or Video Production Tax Credit (CPTC) a number of months ago for our film Skeleton Girl, it remained incomplete, continuously going onto my “to do” list week after week. I bit the bullet and pulled out the file again today. Although it appears we won’t qualify for the tax credit for a few reasons, I thought I would pass on some highlights and facts for others that I hope will help.
The CPTC is a refundable corporate tax credit “designed to encourage the creation of Canadian film and television programming and the development of an active domestic independent production sector.” The program is administered by the Department of Canadian Heritage, through CAVCO (the Canadian Audio-Visual Certification Office) and the CRA (Canada Revenue Agency).
The CPTC is available only to qualified corporations, and yes, the applicant organization must be incorporated to be eligible. I know there are independent filmmakers out there who don’t want to go to the expense and time of incorporating, but if you’re a serious filmmaker, it’s non-negotiable. Get incorporated.
There are about ten other requirements listed in the guidelines that it would be good to review before you submit an application, including time restrictions for filing, and distribution limitations once your film is made and you’re looking for distributors.
There are two parts to the application, Part A and Part B. Part A provides a certificate confirming that the production is a Canadian film or video production. Part B provides a certificate of completion, which is issued where the production is completed and continues to meet the CPTC requirements. Both Part A and Part B can be applied for at the same time but remember that there are deadlines for applying to Part B, so check the information early and diarize it for dealing with before the deadline passes.
There is an application fee to apply for the CPTC. Again, check the guidelines for details on the particulars. And since you’re now incorporated (right?!), the company pays for it.
There are a number of excluded productions (and genres, but those are fairly obvious – no porn, no advertising, no talk shows). If you fall into any of these, you won’t qualify. Check them out.
An individual performing a producer-related or key creative role (these are described in the guidelines) for a production must be Canadian at all relevant times (meaning by the time she/he begins any duties in relation to the project, and during the remaining course of the production and post-production). We were caught with our pants down on this one. It turned out that our highest labour expenditures were for a key creative person who, as it turned out, had applied for permanent resident status but had not yet received it. Even though she had lived in Canada for many years, and had been a landed immigrant for a long time, we were unable to claim any of her labour because she was not recognized as a Canadian citizen as defined in the Citizenship Act. Ouch. Lesson learned.
And lastly, something that had me stumped for a while: the difference between a production being certified by CAVCO and being certified by the CRTC. Here it is, word for word right out of the guidelines. “The CRTC has a Canadian content recognition program which is similar in many respects to CAVCO’s CPTC program. However, there is no tax credit provided through the CRTC. The CRTC will accept CAVCO certification of a production, in lieu of certification by the CRTC. Therefore, an application is often only made to CAVCO where the production is eligible for the CPTC.”
There is a lot more information that I haven’t addressed here including the percentage calculations used for determining the tax credit. The full guidelines can be found by clicking on the link below. I hope you’re still awake and that some of this is helpful. Good luck!
For the CPTC Program Guidelines, go to www.pch.gc.ca/cavco.