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In addition, the actual refund cheque will only be made payable by the CRA to the applicant corporation and not to the assignee. As a result, financial institutions will typically insist upon a power of attorney from the borrower and an irrevocable direction which requires that the check be paid to an address approved by the financial institution.
Film Or Video Production Services Tax CreditThe Film or Video Production Services Tax Credit (the Production Services Credit) is a federal refundable tax credit, administered by CAVCO and the CRA, to promote both domestic production and foreign location filming in Canada. Complete guidelines and application forms are available on CAVCO’s website.
The following is a summary of requirements for eligibility:
- The Production Services Credit is based solely on Canadian labour expenditures. It is equal to 16% of the total cost of qualifying Canadian labour expenditures, for services rendered by Canadians in Canada for an “accredited production.”
- An “accredited production” must meet certain cost minimums and be of an eligible genre. For the purposes of feature films intended for theatrical release, excluded productions include pornography; industrial, corporate and institutional productions; productions (other than documentaries) that primarily consist of stock footage; and productions contrary to public policy.
- To be eligible for the Production Services Credit, the applicant corporation must carry on more than 50% of its activities through a permanent film or video production business, or a film or video production services business, in Canada. The applicant must also either own the copyright in an accredited production or have contracted directly with the copyright owner to perform production services.
- In the case of a feature film, the expenditures must exceed a cost of $1-million.
- The Production Services Credit is not available to productions that have received the Federal Content Credit.
To apply, an eligible production corporation must complete CRA’s form T1177, Claiming Film or Video Production Services Tax Credit. In addition, the corporation must attach the accredited film or video production certificate issued by CAVCO, or a copy, to the T2 Corporation Income Tax Return for the year, and submit it along with Form T1177.
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