Newfoundland and Labrador Interactive Digital Media (IDM) Tax Credit

By mmuise

The Newfoundland and Labrador Interactive Digital Media (IDM) is a refundable tax credit based on eligible salaries and eligible remuneration incurred by an eligible corporation for the development of interactive digital media products during the period of January 1, 2015 to December 31, 2024 inclusive. Applicants must apply to the Minister of Finance for a tax credit certificate within 18 months of the end of each taxation year.

Comments on Funding:

Funding is 40% of qualifying expenditures.
Eligible expenditures include eligible salaries and 65% of eligible remuneration.
The credit value is limited to $40,000 per employee per year and $2 million per company, or group of associated companies, per year.

Deadline: Rolling deadline

Applicants must:

  • be a corporation developing an interactive digital media product,
  • be primarily carrying on the business of interactive digital media development,
  • have a permanent establishment in the province of Newfoundland and Labrador,
  • be a taxable Canadian corporation,
  • hold a valid registration certificate under the IDM program,
  • be incorporated under the Corporations Act or an Act of the Parliament of Canada or another Canadian province.
Application Steps:

The application process is a two part process:

1. first apply for a registration certificate as an eligible corporation. It is recommended that applications be made through the NL Film Development Corporation (part I application form),

2. apply to the Minister of Finance for a tax credit certificate within 18 months of the end of each taxation year (part II application form),

3. file the T2 return.

Documentation Needed:

Applicants must submit the following with the Part I application:
1. incorporating documents, including any subsequent amendments since incorporation,
2. copy of Corporate Income Tax Return (T2) Schedules 9, 23 and 50 (Required when the corporation is associated with any other corporation,
3. corporate chart, if the corporation conducts business with non-arm’s length corporations,
4. description of the project, including: technical specifications, product documentation, storyboard, interactive features, images, text and sound,
5. development timeline,
6. list of estimated eligible salaries,
7. list of estimated eligible remuneration,
8. detailed list of estimated product costs,
9. financial statements for the preceding taxation year.

Applicants must submit the following with the Part II application:
1. financial statements for the taxation year in which the credit is being claimed,
2. individual declaration of residency forms to support Schedule B (Eligible Salaries),
3. statement of eligible remuneration form to support Schedule C (Statement of Remuneration),
4. workplace health and safety compensation commission of Newfoundland and Labrador annual employer payroll statement for the taxation year,
5. proof of payment for eligible remuneration paid within 60 days after the end of the taxation year as indicated in Schedule C.

Other Things to Note:

No other details available.

About the author