Published | Category: Income tax - businesses

Tax Credit for Québec Film Productions

The tax credit for Québec film productions (referred to in the Budget Speech as the refundable tax credit for Québec film and television production) will be reorganized so that a higher basic rate will apply in respect of a film, including a television program, that is not developed from a foreign concept or a foreign format.

New class of eligible films

The Act respecting the sectoral parameters of certain fiscal measures (hereinafter the "sectoral act") will be amended to introduce a new class of films. That class will include any film that is already eligible for the basic tax credit under the current rules and that is developed from a foreign concept or a foreign format.

This amendment will apply to film and television productions for which an application for an advance ruling or, where no such application has previously been filed in respect of the production, for which an application for a certificate is filed with the Société de développement des entreprises culturelles (SODEC) after March 26, 2015.

Increase in the basic rates

In addition, tax legislation will be amended to provide for an increase in the basic rates of the tax credit for Québec film productions in respect of eligible films that are not adapted from a foreign format.

Moreover, the current basic rates will continue to apply in respect of eligible films that are adapted from a foreign format. The various increases will remain the same in respect of all eligible films.

This amendment will apply to film and television productions for which an application for an advance ruling or, where no such application has previously been filed in respect of the production, for which an application for a certificate is filed with SODEC after March 26, 2015.

Other amendments

Furthermore, tax legislation and the sectoral act will be amended to restore the former rules pertaining to the criterion of "non-arm's length," thereby replacing the rules pertaining to the criterion of "associated corporations." Consequential amendments relating to the tax credit for film production services will also be made to tax legislation and the sectoral act.

With regard to corporations, the amendments to tax legislation will apply to labour expenditures or production costs, as the case may be, incurred in a taxation year that begins after March 26, 2015.

Also with regard to corporations, the amendments to the sectoral act will apply to taxation years that begin after March 26, 2015.

For more information, see pages A.84 to A.90 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

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