Are you eligible for the CPTC?
To qualify for the Canadian Film or Video Production Tax Credit (CPTC) program, the applicant must be a qualified corporation that carries on through a permanent establishment in Canada a business that is primarily a Canadian film or video production business. Specifically excluded are prescribed labour-sponsored venture capital corporations, tax-exempt corporations and corporations controlled by one or more tax-exempt persons. In addition, the qualified corporation or a prescribed taxable Canadian corporation that is related to the qualified corporation must own the copyright in the film for which a claim is being made.
A qualified corporation can receive the CPTC at the rate of 25% of qualified labour expenditure incurred for the production of a Canadian film or video production. The qualified labour expenditure may not exceed 60% of the cost of production at the end of the year net of assistance. The tax credit is therefore limited to 15% of the cost of production net of assistance.
What kind of production qualifies?
To qualify for the CPTC program, the Canadian Audio-Visual Certification Office (CAVCO) must certify that the production is a "Canadian film or video production". A Canadian film or video production means a film or video production, other than an "excluded production", produced by a "prescribed taxable Canadian corporation" and that is either a treaty co-production or a film or video production that meets certain specific requirements of the Income Tax Regulations.
Co-productions between Canada and another country are eligible for the CPTC program only when co-produced under an official treaty. Telefilm Canada is responsible for the certification of treaty co-productions. However, in order to obtain a certificate to access the CPTC program, the producer must apply directly to CAVCO.
CAVCO and the Canada Revenue Agency (CRA) jointly administer the CPTC program.
CAVCO is responsible for:
- certifying that the production is a Canadian film or video production; and
- issuing certificates to allow Canadian producers to claim the CPTC.
The CRA is responsible for:
- helping CPTC claimants;
- interpreting and applying section 125.4 of the Income Tax Act and all other provisions in the Act and Regulations that may have an impact on the tax credit;
- reviewing CPTC claims;
- assessing T2 Corporation Income Tax Returns; and
- issuing timely refund cheques.
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