Manitoba interactive digital media tax credit

Manitoba Growth, Enterprise and Trade will issue a tax credit certificate to a corporation that develops and produces an eligible interactive digital media project in Manitoba. The certificate can be issued upon completion of the project or, if the purchaser is not the government or a public body, on a yearly basis. However, the corporation must first receive a certificate of eligibility before the start of the project.

The following conditions apply:

  • a qualifying corporation must be a taxable Canadian corporation with a permanent establishment in Manitoba 
  • repaid or repayable government assistance does not reduce eligible labour costs
  • where a government or public authority is the purchaser of an interactive digital media product, the amount paid by the purchaser and the amount of the interactive digital media tax credit cannot exceed 100% of the project's costs

The credit is equal to:

  • 40% of eligible project costs paid in the tax year to residents of the province, when a corporation pays at least 25% of the salary and wages to employees who are Manitoba residents for the project period
  • as of June 30, 2016, 35% of eligible labour costs for the year, when a corporation that pays less than 25% of its wages to Manitoba employees, still incurs labour expenses of at least $1 million more than government assistance related to those expenses

Before June 30, 2016, limits of 24 months and $500,000 labour expense per project were applicable.

Projects that begin prototyping and product development before 2023 qualify for the credit.

For projects that have been issued an eligibility certificate after 2011 and that start production after 2012:

  • companies may claim up to $100,000 in eligible marketing and distribution expenses that are directly attributable to an eligible production entitled to claim marketing and distribution expenses
  • financial support from the Canada Media Fund that is recoupable or repayable is not treated as government assistance
  • an eligible product that is developed under contract for an arm’s-length purchaser does not need to demonstrate the product will be resold or licensed by that arm’s-length purchaser
  • a broader interpretation of the sale requirement will be used by the province in determining which types of commercialization projects will be eligible

This credit is fully refundable.

Claiming the credit

File the certificate with your return no later than the filing-due date of the tax year following the tax year in which the project was completed.

On line 614 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the credit you are claiming.

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