Digital Animation Tax Credit (DATC)
no fixed amount
Tax credit
Description:
The Digital Animation Tax Credit (DATC) is a refundable corporate tax credit that can be claimed for qualifying labour expenditures directly related to the development of eligible digital animation productions by eligible corporations in Nova Scotia.
Comments on Funding:
The base tax credit is the lesser of
1. 50% of the eligible NS labour expenditure less the value of any assistance received, or
2. 25% of eligible NS labour expenditure plus eligible overhead expenditure (calculated as 65% of the eligible NS labour expenditure) plus 65% of eligible remuneration less twice the value of any assistance.
An additional tax credit of 17.5% is available on eligible Nova Scotian animation labour expenditures (i.e. labour directly related to animation specific activities).
Rolling deadline
Eligibility:
The applicant must:
1. be incorporated in Canada either federally or in one of provinces and be a taxable Canadian corporation,
2. have a “permanent establishment” in Nova Scotia,
3. be Canadian-controlled and primarily engaged in film or video production (more than 50%),
4. not be a labor-sponsored venture capital corporation or registered as an Equity Tax Credit company or a Community Economic Development Investment Fund under subsection 3(2) or 11(2) of the Equity Tax Credit Act,
5. demonstrate that it owns the property rights of the production or have the authorization of the property rights owner to claim the DATC.
Application Steps:
The applicant must submit:
1. a mandatory Part A application before principal photography or key animation of the digital animation production begins and receive an “eligibility certificate” before an application for the Tax Credit Certificate can be made.
2. a Part B application for a Tax Credit Certificate once he obtained the eligibility certificate and no later than 30 months after the end of the taxation year in which the expenditures for the eligible production were made.
Documentation Needed:
The applicant must submit the following documentation in support of his Part A application form:
1. a completed, signed and dated Part A application form,
2. the Synopsis & Script/Treatment of the production,
3. a detailed locked budget signed and dated by the Producer,
4. the Certificate of Incorporation,
5. the Shareholder Registers (for both the applicant and parent company),
6. the Production Service and/or Co-production agreements, if applicable, 7. the Broadcaster/Distribution agreement, if applicable.
The applicant must submit the following documentation in support of his Part B application form:
1. a completed, signed and dated Part B application form,
2. statements detailing the expenditures of the eligible digital animation production (Producers Affidavit, Review Engagement Report or Audit Report),
3. the Production Service and/or Co-production agreements, if applicable,
4. the Eligibility Certificate,
5. the Certificate of Election, if not provided in the Part A application,
6. the Broadcaster/Distribution agreement, if applicable.
The applicant must also submit the original or a copy of the tax certificate issued by the province with his return.
About the author
Maurice