Tax Credits
Tax credits are available at both the Federal and Provincial levels for Canadian, US, and International film companies. Some of the tax incentives available are described below. If you need help, contact British Columbia Film (the organization responsible for administering government tax credits) at 604-736-7997 or visit www.bcfilm.bc.ca. DISCLAIMER: The information provided below is only intended to provide an overview of the tax credits. Although the information gathered in this section is believed to be correct at the time of publication, the Chilliwack Film Commission, the City of Chilliwack, and Chilliwack Economic Partners Corporation cannot be held responsible for any omissions or incorrect information.
British Columbia Tax Credits Available to Foreign Film and Television Producers The British Columbia Production Services Tax Credit (PSTC) encourages film, television and animation production in BC and can be accessed by a broad range of foreign productions. The Basic PSTC** tax credit is 33% of the qualified BC labour expenditure of the corporation.
The REGIONAL PSTC* tax credit is 6% of the qualified BC labour expenditure of the corporation pro-rated by the number of days of prinicipal photography in BC outside of the designated Vancouver area to the total days of principal photography in BC. This tax credit must be accessed in conjunction with the Basic PSTC.
The Additional Distant Location PSTC* regional tax credit of 6% is added to the regional tax credit for principal photography done outside of the nearby region, excluding the Capital Regional District. It is pro-rated by the number of distant location principal photography days to the total BC prinicipal photography days and must by accessed in conjunction with the Regional and Basic PSTC.
The DIGITAL ANIMATION or VISUAL EFFECTS PSTC** tax credit is 17.5% of BC labour expenditures directly attributable to digital animation or visual effects activities. This tax credit must be accessed in conjunction with the Basic PSTC.
The CDN Federal PSTC tax credit is 16% of the qualified Canadian labour expenditures of the corporation, and is in addition to the provincial tax credits.
* The nearby region will extend from the designated Vancouver area north up to and including Whistler, east to include Hope and will include the Capital Regional District. The distant region will be the area of the province beyond the nearby region.
** These rates are effective for productions that begin principal photography after February 28, 2010. For more information on British Columbia's process, eligibility and lines, contact the program administrator: British Columbia Film:
Tel. 604-736-7997
Email: bcf@bcfilm.bc.ca British Columbia Tax Credits Available to Domestic Film and Television Productions British Columbia offers two tax credit programs: Film Incentive BC (FIBC) program is for domestic productions that are Canadian owned and controlled and have qualifying levels of Canadian content. Production Services Tax Credit (PSTC), is open to both domestic and foreign producers, and has no Canadian contect requirements.
A production corporation may only access either the FIBC or the PSTC program, but not both with respect to a production.
Film Incentive BC Tax Credit Rate
Film Incentive BC will refund a portion of labour expenditures incurred in making film or television productions in British Columbia. There is a basic incentive of 35% (up from 30%) of eligible labour costs until April 2013. In addition, there are four bonus incentives: - A regional production incentive allows producers to claim a refund of 12.5% of eligible labour costs for doing principal photography in the nearby region. Producers can claim 18.5% of eligible labour costs for doing principal photography in the distant region. This incentive must be accessed in conjunction with the Basic Tax Credit.
- A training incentive allows producers to claim a refund of 30% of trainee salaries, capped at 30% of eligible labour costs for providing training opportunities for workers enrolled in an approved training program. This incentive must be accessed in conjunction with the Basic Tax Credit.
A Digital Animation or Visual Effects* tax credit of 17.5 percent: The BC Labour expenditures directly attributable to digital animation or visual effects activities. This tax credit must be accessed in conjunction with the Basic tax credit.
The CDN Federal Production Tax Credit (CPTC)** of 25% is for qualified Canadian expenditures of the corporation.
* This rate is effective for productions that begin prinicpal photography after February 28, 2010.
** The Canadian Federal CPTC is in addition to the provincial tax credits. Who is eligible? All qualifying companies must be BC-based and Canadian-owned production companies.
To access the basic incentive a production company must be BC-controlled and have majority copyright ownership of the project.
To access the regional and training incentives alone, a production company must be BC-based and Canadian-owned.
Out-of-province investors can invest in a project but only BC-based production companies can receive the incentives.
What are the Project Criteria?
All projects must incur a minimum of 75% of production costs in BC. To qualify for the basic incentive, projects must meet a minimum of 6 out of 10 Canadian "content" points as per Canadian Audio-Visual Certification Office (CAVCO) guidelines. For More Information:
See Our Tax Links (below). See BC Film's Web site www.bcfilm.bc.ca Or email them atbcf@bcfilm.bc.ca, to request one of their Tax Credit Program Packages. Note that this credit is also known as the Film and Television Tax Credit. More information on this tax credit can also be found at Government of British Columbia, Income Taxation Branch's Web site: http://www.rev.gov.bc.ca/itb/filmcred/film.htm BC Production Services Tax Credit (Provincial)
This tax credit is also available to foreign film companies.
The Production Services Tax Credit program is a refundable tax credit, equal to 25% of qualifying labour expenditures incurred in BC and paid to BC residents in making a film or television production. Regional Production Services Tax Credit
The Regional Production Services Tax Credit Program is a refundable tax credit equal to 6% (in the nearby region) and 12% (in the distant region) of qualified BC labour expenditure pro-rated by the number of days of a principal photography in British Columbia outside of the designated Vancouver area to the total days of a principal photography in British Columbia. Who is eligible?
This program is available to accredited film and video production corporations who produce accredited productions in BC. To be eligible you must have incurred qualifying labour expenses in BC in making an eligible production. The company does not have to be a Canadian-owned corporation, and there is no requirement that it have an interest in the copyright. What are the Project Criteria?
Like the Federal tax credit, there is a minimum size (ie: production costs must exceed $100,000 cdn for a 30-minute TV series episode, etc.) and genre restrictions (which exclude news programs, talk shows and sports events). The Production Services Tax Credit may not be claimed in relation to a production that is claiming any other tax credit under the Film Incentive BC program. How to apply?
You need to obtain an accreditation certificate that you will attach to your corporate income tax return (T2). Canada Customs and Revenue Agency (formerly Revenue Canada) administers the processing of claims and issuance of refunds. The credit is refundable to the extent it exceeds the corporation's income tax payable. For More Information:
See BC Film's Web site www.bcfilm.bc.ca Or email them at bcf@bcfilm.bc.ca, to request one of their Tax Credit Program Packages. See the following PDF from BC Film regarding this credit: FPBCTC.pdf Or, go directly to the Government of British Columbia, Income Taxation Branch's Web site:
www.rev.gov.bc.ca/itb/prodserv/prod.htm.
Canadian Film or Video Production Tax Credit (Federal) (FTC)
This tax credit is available to foreign film companies -- as co-producers only.
The objective of the CPTC is to encourage Canadian programming and to develop an active domestic production sector. This credit is available at a rate of 25% of qualified labour expenditures expended after 1994 by a qualified corporation for the production of a Canadian film or video production. Eligible salaries and wages qualifying for the credit may not exceed 60% of the production net of assistance, as certified by the Minister of Canadian Heritage. The credit will, therefore, provide assistance of up to 15% of the cost of production, net of assistance. Who is eligible?
The production must be certified by the Canadian Audio-Visual Certification Office (CAVCO). The corporation must, throughout the year, be a prescribed taxable Canadian corporation with a permanent Canadian establishment (as defined by regulation) whose primary business activities include Canadian film or video production. This credit is also available to foreign companies under the Official International Treaty Co-Production -- and only under an official treaty. Note that a number of key personnel must be Canadian and the majority of production costs must be payable to Canadians. (A non-canadian producer may be allowed if a foreign courtesy credit / exemption has been granted by CAVCO). Producers cannot access both federal credits. What are the Project Criteria?
There is a minimum size and genre restrictions (which exclude news programs, talk shows and sports events). For More Information:
Contact the Canadian Audio-Visual Certification Office (CAVCO), Department of Canadian Heritage:
www.pch.gc.ca/cavco/
Film or Video Production Services Tax Credit (Federal) (PSTC)
This Federal tax credit is the most commonly used tax credit by foreign film companies.
The PSTC is designed to enhance Canada as a location of choice for film and video productions employing talented Canadians, strengthen the industry and secure investment. This credit is equal to 16% of salary and wages paid to Canadian residents or taxable Canadian corporations (for amounts paid to employees who are Canadian residents) for services provided to the production in Canada. This refundable tax credit has no cap on the amount which can be claimed. The corporation must contract directly with the copyright owner or be the copyright owner of the production. Who is eligible?
You must be a taxable Canadian corporation with a permanent establishment in Canada or a foreign-owned corporation with a permanent establishment in Canada. You will need to obtain a certificate from CAVCO, who will determine the eligibility of your production. Producers cannot access both Federal credits. For More Information:
Contact the Canadian Audio-Visual Certification Office (CAVCO), Department of Canadian Heritage:
www.pch.gc.ca/cavco/
Taxation • Income Tax for Non-Resident Actors (Federal Withholding Tax)
• Customs and Duties (Importing Goods)
• Federal Goods and Services Tax
• Provincial Sales Tax Taxation Index
Income Tax for Non-Resident Actors: Federal Withholding Tax
Effective January 2001, non-resident actors will pay a flat 23% tax on compensation for their acting services. This tax has been changed from previous rules to simplify taxation and to make Canadian taxation more in line with US taxation. High-income foreign actors will not see any changes to their net income compared to if they had shot in the US. Under the tax treaty between Canada and the US, taxes paid in Canada are credited when actors file their US tax returns -- circumventing double taxation for those who work on both sides of the border. This tax is applicable except where the non-resident can adequately demonstrate that the withholding tax normally required is in excess of their ultimate Canadian tax liability. In this case, the Canada Customs and Revenue Agency (CCRA) may reduce or waive the withholding tax accordingly. The onus is on the non-resident to demonstrate to CCRA that a waiver or a reduction of the amount required to be withheld is warranted. This may be based on the application of an income tax treaty with their country of residence. Generally, most tax treaties allow waivers to be approved for behind the scenes personnel where they have no fixed base or permanent establishment in Canada and they do not provide services in Canada of a recurring or repetitive nature. The Canada-US Income Tax Treaty allows waivers to be granted for artists where their gross income and benefits do not exceed $15,000 CDN in a calendar year, and who have no fixed base in Canada. NOTE: To apply for a waiver, submit all the required documentation to the Vancouver Film Services Unit at least 30 days prior to the commencement of services. NOTE: Non-Canadian personnel will need a work permit. See Our Labour Information Section... For More Information:
Contact the Vancouver Film Services Unit, Canada Customs & Revenue Agency: Tel: (604)666-7911
See Our Tax Links (below). Customs and Duties (Importing Goods) Goods entering Canada temporarily for use on a film production will qualify for duty-free entry (effective January 1, 1998). Generally, all goods being imported temporarily, as long as they are not being imported for sale, lease, further manufacturing, or processing, will qualify for duty-free entry under tariff item No. 9993.00.00 and can enter temporarily for up to 18 months. Goods imported temporarily may be subject to the Goods and Services Tax (GST), however, you can claim full or partial relief upon their return to the point of origin. Contact Canada Customs and Revenue Agency for more information. For answers to other general customs enquiries, or to locate your nearest customs district office, please call their information line: From within Canada, call: 1-800-461-9999 (toll free)
From outside Canada, call: 1-204-83-3500 or 1-506-636-5064 (long-distance charges apply)
Harmonized Sales Tax (HST)
The 7% Provincial Sales Tax and the 5% Goods and Services Tax are combined to give a total Harmonized Sales Tax (HST) of 12%. This is the lowest rate in Canada. | 
