Fuel – The dictionary tells us it’s something that ‘ sustains and encourages ‘. That’s pretty well exactly how we position Canadian film tax credit incentives. These credits, when utilized, or financed properly, are without a doubt providing you with a very significant portion of your total finance plan.
We never hate to ‘ diss ‘ the enemy, but we’re on the side of Canadian tax credit financing when it comes to the current turmoil we hear about in U.S. states and other markets. If you are a producer or project owner in the genres of film, television, and animation areas of entertainment you can benefit from a substantial refundable tax credit based on the Canadian federal and provincial governments commitment to the revenue creation by this vibrant industry.
We’re big fans of Mr. Jay Epstein who writes on Hollywood financing. At a recent breakfast we attended Jay spoke of the reality that it’s harder to make a small or medium sized independent than a ‘ big budget blockbuster ‘ as he called them. And we agree.
Naturally we’re the first to admin that you can be forgiven for grimacing somewhat when you hear the words ‘ government ‘ and ‘ financing ‘ in the same sentence. We felt the same way too. But when you sit down with the various government entities , such as we have , you get a profound sense that these government corporations, mostly Crown corp’s in nature are taking seriously their mandate to administer and refund millions of dollars in film tax credit incentives .
We haven’t counted recently, and it’s almost a guess, but at least one of every 5 projects we see come across our desks involves an animated feature. As we noted, computer animation and special effects features are fully eligible for the same non refundable tax credits.
The amount of funds, non repayable that you can receive on any given Canadian production (or co -production) by the way, is significant. Anywhere from 30- 45% of the total financing you need on a project can be funded solely through the tax credit process.
Clients want choices, and they have them. If you choose to finance your tax credits you can receive funding on completion of your project, or, perceived by clients as even more valuable, you can use tax credit financing to help cash flow and monetize your project.
It always seems a bit of a mystery to clients as to how tax credits are calculated. A specialized film tax credit incentive accountant can help you maximize the credits and financing by point out various nuances about the ‘ point system ‘ that is utilized around eligible salaries for Canadian residents and ‘qualified non residents ‘.
Want a quick example – For you non Canadians there are ten Canadian provinces – Ontario, BC and Quebec seem to be most familiar to most of the U.S. folks that call us. But, if you chose to film or produce in Manitoba you get a 5% producer bonus if a resident there receives a producer credit. And on it goes…
If anything we’ve just proven that the bottom line is that with all the risk and timelines involved in making film, tv and animation features you certainly want to associated yourself with a small core team in the area of canadian film tax credit incentives and the financing thereof . And trust, us, this is one area where accounting isn’t boring – as your tax credit accountant has the ability to maximize your refund based on his or her knowledge of the Canadian program.
Speak to a trusted, credible, and experienced Canadian business financing advisor in the financing of tax credits in Canada. Money for nothing… well almost!