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Ontario Interactive Digital Media Tax Credit (OIDMTC)

The Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit based on eligible Ontario labor expenditures and eligible marketing and distribution expenses claimed by a qualifying corporation with respect to interactive digital media products.

Offered by Ontario Creates

Amount

Refundable tax credit: 40% of Ontario labour costs + M&D costs up to $100k per product (Non-Specified products); 35% of Ontario labour costs (Specified fee-for-service products and Digital Game Company Claims); no annual cap

Quick eligibility check

Years in business
No minimum stated
Employees
No limit stated
Revenue
No limit stated
Legal structure
Incorporated
Location
Ontario

Who can apply

$500K MINIMUM THRESHOLD

  1. The corporation must incur a minimum of $500K in Ontario labour

directly related to development of digital games in the tax year of your claim.

  1. Game development labour included in the minimum threshold must

be eligible under s.93.2.

SPECIALIZED DIGITAL GAME CORPORATION CLAIMS 93.2

Companies making a claim under 93.2 must also meet:

Scenario ā€œAā€:

80% of salaries and wages rendered in Ontario in tax year of claim must be directly related to game development.

OR

Scenario ā€œBā€:

  1. 90% of gross revenues for tax year of

claim must be directly related to game development.

QUALIFYING DIGITAL GAME CORPORATION (S 93.1)

A ā€œqualifying digital game corporationā€ is:

  1. a Canadian corporation (Canadian or foreign controlled), that

carries on through a permanent establishment in Ontario a business that includes the development of digital games;

  1. is not controlled directly or indirectly in any manner whatever by

one or more corporations all or part of whose taxable income is exempt from tax

  1. that is not a prescribed labour-sponsored venture capital

corporation under the Federal regulations, and

  1. is not a taxable Canadian corporation the primary activity of which

is to provide the services of a single individual and all the issued and outstanding shares of the capital stock of which (other than directorsā€™ qualifying shares) are owned by that individual

QUALIFYING DIGITAL GAME CORPORATION

CLAIM UNDER S 93.1

An ā€œeligible digital gameā€ claimed under s 93.1 must be:

  1. a singular game;
  2. developed in whole or in part by the applicant corporation under the

terms of an agreement with a purchaser corporation (it can be a related purchaser);

  1. the eligible labour costs to develop the game must not be less than

$1 million incurred by the applicant company within any 36 month period ending in the tax year of the claim;

  1. the game must meet all requirements of an eligible interactive digital

media product and must be considered a digital game in the opinion of Ontario Creates;

  1. the game cannot be previously claimed as a specified product under

s93 or claimed as a digital game under s.93.2.

NON-SPECIFIED PRODUCTS

  1. Interactive Digital Media products developed, owned

and exploited by the applicant.

SPECIFIED PRODUCTS

  1. Interactive Digital Media products developed

by the applicant under a fee-for-service arrangement with an armā€™s length Purchaser corporation.

ELIGIBLE APPLICANTS

  1. Canadian Corporation (must be incorporated in

Canada but can be Canadian or foreign controlled.)

  1. Must have a permanent establishment in

Ontario where the product is developed.

  1. Must not be controlled directly/indirectly by a

corporation that is exempt from tax.

DEFINITION OF IDM PRODUCT

PRIMARY PURPOSE INTERACTIVITY

  1. Educate child users under the age of 12, or ā€¢ They achieve their primary purpose by presenting

entertain information in at least two of the following forms:

  1. More than 50% of a product must meet the i) text

primary purpose requirement and there ii) sound can only be one primary purpose iii) images

  1. Cannot be primarily for interpersonal ā€¢ By interacting with them the user can choose

communication what information is to be presented and the form

  1. Cannot be primarily promotional and sequence in which it is presented.
  2. Note: Advergaming games (heavily branded ā€¢ Note: ā€œgames of chanceā€ and 360ĢŠ cinematic VR

that promote things) are considered video products are often are not interactive primarily promotional enough to be eligible for OIDMTC

  1. Web-series or linear video products are not

considered interactive digital media products

DEFINITION OF IDM PRODUCT

PRELOADED CONTENT THE USER

  1. As of the date of completion the product ā€¢ The user is intended to be an individual

should contain preloaded content that ā€¢ The user interacts directly with the product achieves the primary purpose using two of ā€¢ The product is developed to entertain users, text, sound or images. or educate users under 12 years of age

  1. If your product requires user content to

operate or for the product to contain content that meets the primary purpose ā€“ it is not eligible for OIDMTC.

  1. Applicants must provide Ontario Creates

access to the version of the product as it existed upon completion to review the content.

W H AT K IND O F P R O D U C T S ARE E L IG IB L E ?

  1. Games
  2. Apps/Modules (except apps/modules where the majority of the

content also appears on a website that is not eligible ā€“ see below)

  1. Interactive VR Products (i.e. those with hot-spots)
  2. Certain Websites that primarily (more than 50%)
  3. Hosts one or more digital games
  4. Features content that educates child users of the website under

the age of 12

  1. Hosts one or more virtual or augmented reality experience
  2. Features content related to an eligible film/TV/or internet

production where:

  1. the OIDMTC applicant has an agreement with the copyright

holder of the related film/TV/or internet production to develop the website; AND

  1. there is no more than 10% of the original film/TV/or internet

production exhibited on the website.

ELIGIBLE REVENUE GENERATING STREAM

Ontario Creates cannot certify a Non-Specified or Specified product until we can see that it had or has an eligible revenue generating stream.

The product does not need to have already generated revenue before it is certified but we do need to see that it is available or was available for commercial exploitation as outlined in the OIDMTC Regulations.

  1. Is the product being offered for sale or license (includes subscription

fees)?

  • Are there in-product purchases?
  • Is the product generating revenue via 3rd party advertising?
  1. Is the product being promoted using the sale or license of another

product developed by the applicant that can be considered an extension or upgrade of the product?

Note For Specified Products:

  1. If this is a Specified product we need to see that the product has an

eligible revenue generating stream to make money for the armā€™s length Purchaser corporation.

About the funding

DIGITAL GAME COMPANY CLAIMS

No Caps or Limits on OIDMTC you can claim ā€¢ Specialized Digital Game Corporation (93.2) claim for slate of games developed by applicant with minimum $500,000 Ontario labour directly attributable to developing digital games in tax year (+ 80% wages or 90% yearly gross revenues directly related to games development) for tax years starting after April 11, 2019 ā€¢ Qualifying Digital Game Corporation (93.1) claim for incurring minimum $1 million in Ontario labour directly attributable to developing a game in a 36 month period under contract with a Purchaser corporation.

Ontario Interactive Digital Media Tax Credit (OIDMTC) ā€“ 40% labour + M&D spend with IP ownership OR 35% for development labour under fee-for-service Ontario Film & Television Tax Credit (OFTTC) ā€“ 35% labour + additional 10% regional bonus if applicable Ontario Production Services Tax Credit (OPSTC) ā€“ 21.5% labour + spend Ontario Computer Animation and Special Effects Tax Credit (OCASE) ā€“ 18% labour Ontario Book Publishing Tax Credit (OBPTC) - 30% labour + spend

ONTARIO TAX CREDITS - HIGHLIGHTS

Show all funding details

Refundable No sunset clause No annual cap The amount of the credit, net Ontarioā€™s tax credits do not have an There is no cap on the $ you of any Ontario taxes owing, expiry date. can claim or receive.* will be paid to the qualifying * With the exception of OBPTC corporation. If the qualifying corporation does not owe any taxes, the full amount will be paid out.

OIDMTC is an after-the-fact type of revenue source in the form of a refundable tax credit. The IDM product must be completed and costs incurred before you can apply for OIDMTC* 40% 35% 35% Non-Specified Specified Products Digital Game products (fee-for service) Company Claims Ontario labour costs Ontario labour costs Ontario labour costs + M&D costs up to *games do not need $100k per product to be completed

ELIGIBLE LABOUR UNDER 93.2 SPECIALIZED

ļƒ˜ Wages and salaries of your Ontario based employees

incurred in the tax year.

ļƒ˜ Armā€™s length remuneration incurred in the tax year and

paid to:

  1. Individuals who are not employees of your company,
  2. A sole proprietorship for services rendered by the

individualā€™s employees,

  1. Another taxable Canadian corporation for the

services personally rendered by an individual if that individual is the sole shareholder of the corporation, and the primary activity of the corporation is the provision of the individualā€™s services (otherwise known as a loan-out corporation).

ELIGIBLE LABOUR UNDER 93.2 SPECIALIZED

DIGITAL GAME CORPORATION (CONTā€¦)

  1. All labour must be incurred for services personally rendered by an individual who

was resident in Ontario at the end of the calendar year that precedes the calendar year in which they rendered the services.

  1. All labour claimed must be directly attributable to the development of an eligible

digital game.

  1. The labour expenditure is paid no later than 60 days after the end of the tax year.

ELIGIBLE LABOUR UNDER 93.1 QUALIFYING

ļƒ˜ Wages and salaries of your Ontario based employees incurred in the 36 month

period ending in the tax year of the claim.

ļƒ˜ Armā€™s length remuneration incurred in the 36 month period ending in the tax year

of the claim and paid to:

  1. Individuals who are not employees of your company,
  2. A sole proprietorship for services rendered by the individualā€™s employees,
  3. Another taxable Canadian corporation for the services personally rendered by

an individual if that individual is the sole shareholder of the corporation, and the primary activity of the corporation is the provision of the individualā€™s services (otherwise known as a loan-out corporation).

ELIGIBLE LABOUR UNDER 93.1 QUALIFYING

DIGITAL GAME CORPORATION (CONTā€¦)

  1. All labour must be incurred for services personally rendered by an individual who

was resident in Ontario at the end of the calendar year that precedes the calendar year in which they rendered the services.

  1. All labour claimed must be directly attributable to the development of an eligible

digital game.

  1. The labour expenditure is paid no later than 60 days after the end of the tax year.

ELIGIBLE LABOUR NON -SPECIFIED & SPECIFIED PRODUCTS

  1. Amounts paid for wages and salaries of your Ontario based employees

for product development who reported to a permanent establishment in Ontario of the qualifying corporation where the eligible Non-Specified or Specified products are developed.

  1. Amounts paid as remuneration to armā€™s length Ontario based individuals

for services rendered in Ontario for product development (includes individuals, individuals paid via loan out corporations where they are the sole shareholder/employee, and amounts paid to partnerships for the services of an individual partner.)

  1. Amounts paid to a taxable armā€™s length Canadian corporation for

services rendered by their employees in Ontario for product development. (these amounts cannot be included as eligible remuneration labour to qualify for the 80/25 test).

No Caps or Limits

80/25 RULE

(Applicable to Non-Specified and Specified Products Only) 100% = Total Development Labour

  1. 25% wages and salaries of your Ontario resident employees for

25% Wages & Salaries work developing the product in Ontario. of Employees

  1. 80% must be wages and salaries of your Ontario resident

employees plus armā€™s length remuneration paid to:

I. Ontario individuals working as sole proprietorships (no employees) 80% II. Ontario individuals paid via personal corporation where Remuneration + they are the only shareholder, and employee if applicable. Wages & Salaries

MARKETING & DISTRIBUTION

NON-SPECIFIED PRODUCTS

  1. Can claim up to a max of $100,000 of eligible M&D

expenditures per eligible Non-Specified product. $100K

  1. M&D Costs incurred in the 24-month period prior to in eligible M&D

the completion date of the Non-Specified product, and costs per product in the 12-months following the completion date of the product.

  1. Eligible M&D Costs must be directly attributable to 50%

advertising or promoting the eligible product or of meals & distributing the product to potential customers. entertainment

  1. Only 50% of meals & entertainment costs allowed. costs allowed

CLAIM PERIOD ELIGIBLE LABOUR NON -SPECIFIED

AND SPECIFIED PRODUCTS

  1. Can claim development labour expenditures for the 37

month period prior to the end of the month in which the product was completed (e.g. for a product completed November 28, 2025, applicant can claim labour expenditures going back in time 37 months from November 30, 2025. In this case the claim period would be November 1, 2022 to November 30, 2025.) Other Criteria:

  1. Labour must be directly attributable to the development of

the eligible product

  1. Paid to Ontario residents for services rendered in Ontario
  2. Must be paid no later than 60 days after the end of the

taxation year

Claimed through the Canada Revenue Agency on your corporate tax return.

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