Published | Category : Income tax - businesses
Refundable Tax Credits for the Production of Multimedia Titles
Tax legislation will be amended to restore the former rates applicable to labour expenditures that qualify for the tax credit for multimedia titles and the tax credit for corporations specialized in the production of multimedia titles. As such, the rates will be
- 30% in respect of a multimedia title intended to be commercialized that is not a vocational training title, with a 7.5% premium if such a title is available in a French version;
- 26.25% in respect of any other multimedia title, including a title that is a vocational training title.
Tax legislation will also be amended to provide that a qualified labour expenditure in respect of an eligible employee may not exceed $100,000, calculated on an annual basis. Consequently, the maximum tax credit for a taxation year cannot exceed $37,500, $30,000 or $26,250 annually, as the case may be, per eligible employee.
Subject to the exception below, this limit will apply to the tax credit for multimedia titles and the tax credit for corporations specialized in the production of multimedia titles, for a taxation year, in respect of each eligible employee of a corporation or of a subcontractor with which the corporation was not dealing at arm's length at the time the subcontract was entered into.
For a taxation year of a corporation, the $100,000 limit will not apply to a qualified labour expenditure incurred in the year and paid in respect of an eligible employee of the corporation or of the subcontractor with which the corporation was not dealing at arm's length, up to the number of such eligible employees to whom the highest qualified labour expenditures, corresponding to 20% of the total number of eligible employees, will be attributable.
The amendments to the tax legislation will apply to both the tax credit for multimedia titles and the tax credit for corporations specialized in the production of multimedia titles in respect of a qualified labour expenditure incurred after March 26, 2015, or in respect of a qualified labour expenditure incurred under a contract entered into after March 26, 2015, as the case may be.
For a corporation's taxation year that includes March 26, 2015, the $100,000 limit will be calculated, according to the usual rules, in proportion to the number of days in the taxation year that follow that date.
For more information, see pages A.77 to A.80 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.