Ontario Computer Animation and Special Effects Tax Credit (OCASE)

By mmuise
Description:

The Ontario Computer Animation and Special Effects (OCASE) Tax Credit is a refundable tax credit equal to 18% of the qualifying labor expenditures for eligible computer animation and special effects activities, incurred by a qualifying corporation in a tax year for an eligible production.


Comments on Funding:

Funding is 18% of the eligible Ontario labor expenditures. There is no cap on eligible Ontario labour expenditures.
The amount of the credit, net of any Ontario taxes owing, will be paid to the qualifying corporation. If the qualifying corporation does not owe any taxes, the full amount will be paid out.

Deadline: Rolling deadline
Eligibility:

Applicants must:

  • be a Canadian corporation;
  • perform eligible computer animation and special effects activities for the eligible production at a permanent establishment in Ontario for the tax year;
  • not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario) for the tax year;
  • not be controlled directly or indirectly, at any time in the tax year, in any way, by one or more corporations, all or part of whose taxable income is exempt from tax under section 57 of the Corporations Tax Act (Ontario) or Part III of the Taxation Act, 2007 (Ontario);
  • not be a prescribed labour-sponsored venture capital corporation at any time in the tax year;
  • receive the Ontario production services tax credit or the Ontario film and television tax credit.
    (EXCLUDE/to remove:
  • it is not “controlled directly or indirectly in any manner” (see link in Appendix 1) by one or more corporations that are exempt from tax under Part II of the Corporations Tax Act (Ontario), nor is it a labour-sponsored venture capital corporation as defined in the Income Tax Act (Canada).”
    The production must also have received an OFTTC or OPSTC certificate to be eligible for the OCASE tax credit.
    The OCASE Tax Credit legislation (Section 90 of the Taxation Act, 2007) and OCASE Tax Credit regulation (Regulation 37/09) take precedence over any provision of these Guidelines.
Application Steps:

The applicant must:

1. apply online to Ontario Creates for a certificate of eligibility. Only one certificate of eligibility is issued for all of the eligible productions for the tax year.

2. file the certificate of eligibility and a completed Schedule 554, Ontario Computer Animation and Special Effects Tax Credit, for each eligible production together with the tax return to Canada Revenue Agency in order to claim the Ontario computer animation and special effects tax credit.



Please note: there is an additional filing fee of $100 applied to applications for Certificates of Eligibility received more than 24 months after the year-end of the claim.

Documentation Needed:

Applicants must submit:
1. the certificate of eligibility issued by Ontario Creates;
2. the completed Schedule 554, Ontario Computer Animation and Special Effects Tax Credit, for each eligible production;
3. their T2 Corporation Income Tax Return for the year;
4. their completed OCASE Tax Credit Application and supporting documentation, including:
a) Administration Fee payable by Interac e-transfer to Ontario Creates;
b) Applicant Declaration;
c) Incorporation Documents for the qualifying corporation;
d) completed and signed Corporate Schedule for the applicant company;
and so on…

Other Things to Note:

1. OCASE is based on fiscal year. Applicant's claim must be based on actual expenditures, not projections, so applicants should submit their claim after the close of their financial year when all eligible activities are completed and a DVD of the work done is available. 2. Ontario Creates does not impose a deadline for OCASE applications, but there are taxation deadlines that may preclude receiving a tax credit for your year. Please check in with the Canada Revenue Agency if you’re unsure whether you’re still eligible to file or amend your corporate tax return. (Canada Revenue Agency Film Services Unit: (416 973-3407)
3. The OCASE tax credit administration fee is calculated as 0.15% of the eligible labour expenditures for the application. There is a minimum fee of $500 per application and maximum fee of $10,000 per application. OCASE Tax Credit administration fees are used by Ontario Creates to partially offset the cost of administering the OCASE Tax Credit.
Guidelines updated April 2022
Date modified: 2022-06-17

About the author
mmuise