Tax Credits

Question 1

What does CAVCO do?

Answer 1

Certifies domestic tv/film and international treaty co-productions applying for canadian tax credits (provided by CPTC)

If your project was funded by Canadian grants - they check whether your project will be Canadian ENOUGH

Question 2

What are 4 things CAVCO looks at to certify whether your content will be “Canadian enough”?

Answer 2

• Either the director or writer has to be canadian
• at least one of 2 lead performers has to be canadian
• 6/10 points
• at least 75% of service costs and post must be spent in canada

Question 3

Which fees are included in ‘service costs’?

Answer 3

Producer / key creative personnel payments

Accounting and legal payments

Insurance and financing costs (bank fees)

Indirect expenses not related to the production (medical fees from tests needed for insurance, wire transfer fees, etc)

Question 4

What does CAVCO require of a canadian production company that CRTC doesn’t?

Answer 4

The Canadian production company must be the copyright owner for all commercial purposes for min. 25 years

The project must be shown in CAD within 2 years after completion

Question 5

What does CRTC do?

Answer 5

Licenses Canadian broadcasters and determines how much of a licensee’s schedule must be reserved for Canadian content.

Question 6

Can a non-canadian producer apply for CAVCO or CRTC?

Answer 6

No

Question 7

What are the CRTC requirements?

Answer 7

• All producers canadian
• 6/ 10 points
• 75% of service / post fees are cad

Question 8

Briefly describe the 3 major exceptions for CRTC qualification

Answer 8

1. International Co-productions:
   - 5 / 10 points
   - 50% of service / post fees are cad
   - Cad director OR writer AND 1/2 leads

*make sure this works for other countries point systems / rules

2. TV series: 60% of episodes have to average at 6/10 points
3. Production packages: any minority cad participants don’t have to meet the point system

(co-productions can mean 2+ sources, so let’s say one canadian company gives 40%, and other international companies pitch smaller percentages - including another minority canadian participant - that minority Canadian involvement doesn’t have to meet the point system)

Question 9

What’s the federal tax credit for canada? Which part of the budget can it be applied?

Answer 9

20-25% of labor expenditure

*drop expectation a few % points so you’re not screwed if you don’t get the number you’re expecting

Question 10

What’s the provicinal tax credit for canada? Which part of the budget can it be applied?

Answer 10

30-35% of labor expenditure

Question 11

Which province is the best for provincial film tax credits?

Answer 11

Newfound land

Question 12

Name 3 things you can do to boost your provincial tax credits

Answer 12

10% boost if you shoot entirely outside GTA, or 80% outside GTA IF you have 5 location days in ontario (or for tv series: number of episodes = ontario location days)

Regional Bonus: wholly animated films with 85% of key animation done IN ontario OUTSIDE GTA

Question 13

When should you apply for tax credits?

Answer 13

AFTER post - your post people might also be cad

Question 14

How long does it typically take to get your tax return?

Answer 14

12-18 months

Question 15

Describe the point system for CRTC

Answer 15

CAD
- Director - 2 points
- Screenwriter - 2 points
- 1st and 2nd lead - 1 point each
- PD OR Art Dir. - 1 point
- DP (or if no DP - cam op) - 1 point
- Music composer - 1 point
- Picture editor - 1 point

Question 16

What are the CRTC point requirements from the following grant agencies

a) Telefilm
b) Rogers
c) CMF

Answer 16

a) Telefilm: 8/ 10 points
b) Rogers: 6/10 points
c) CMF: 10/10 points (TV)

Question 17

While waiting for your tax credit, where you can you apply for interim financing?

Answer 17

1. Rogers Telefund
2. Bank
3. Private Investor (if possible, incentivize them w tax return)

Question 18

Name the perks and cons of using rogers telefund for gap financing

Answer 18

NO setup fee and low interest

Lots of paperwork

Question 19

Which special tax credit can 1st time producers get?

Answer 19

40% IF budget is over $250K

Question 20

What can you do ON the budget to increase tax return

Answer 20

Include crew kit fees in their labor fee

Question 21

What must a cad production company have to be eligible for ontario tax credits?

Answer 21

• files for ontario tax return
• permanent office in ontario
• producer of production must have been an Ontario resident for tax purposes at the end of both (two) calendar years prior to commencement of principal photography

Question 22

What must a cad PROJECT / production have to be eligible for ontario tax credits?

Answer 22

• 6/10 points
• predominantly shot in ontario *exceptions
• 75% of total final costs in ontario