Ontario Production Services Tax Credit (OPSTC)

By mmuise
Description:

The Ontario Production Services Tax Credit (OPSTC) is a refundable tax credit based upon Ontario qualifying production expenditures (labor, service contracts and tangible property expenditures) incurred by a qualifying corporation with respect to an eligible film or television production.
It can be combined with the federal Film or Video Production Services Tax Credit of 16% of qualified Canadian labor expenditures.


Comments on Funding:

Funding is 21.5% of all qualifying production expenditures incurred in Ontario. The labor expenditures must be at least 25% of the qualifying production expenditures claimed.
The OPSTC can be combined with the federal Film or Video Production Services Tax Credit of 16% of qualified Canadian labour expenditures. There are no per-project or annual corporate tax credit limits.

Deadline: Rolling deadline
Eligibility:

Applicants must:

  • be a Canadian or foreign-owned corporation;
  • carry on a film or video production, or production services business at a permanent establishment in Ontario;
  • files an Ontario corporate tax return;
  • own the copyright in the eligible production, or contracts directly with the copyright owner to provide production services to an eligible production;
  • not be exempt from tax,
  • not be “controlled directly or indirectly in any manner” by one or more corporations that are exempt from tax,
  • not be a labour-sponsored venture capital corporation for purposes of section 12
  • 4 of the Income Tax Act (Canada).
    Applicants cannot claim the Ontario production services tax credit if they claim the Ontario film and television tax credit for that same production for any tax year.
Application Steps:

Applicants must:

1. apply to Ontario Creates (an agency of the Ontario Ministry of Tourism, Culture and Sport) for a certificate of eligibility,

2. submit the application via the Ontario Creates Online Application Portal (OAP) ,

3. pay the administration fee by Interac e-transfer to Ontario Creates at the time of submission of the application,

4. file the certificate of eligibility and a completed Schedule 558, Ontario Production Services Tax Credit together with the tax return to Canada Revenue Agency in order to claim the Ontario Production Services Tax Credit.

Fees:

1. There is an additional filing fee of $100 for applications that are submitted more than 24 months from the company’s relevant year-end; and a fee of $100 for amended Certificates.

2. There is an administration fee for each application for an OPSTC Certificate of Eligibility, payable at the time of submission of the application. The administration fee is calculated as 0.15% of the eligible expenditures for the application. There is a minimum fee of $5,000 per application and a maximum fee of $10,000 per application, as set out in the OPSTC Administration Fee Schedule (see Appendix 4). OPSTC administration fees are used by Ontario Creates to offset its costs of administering the OPSTC.

Documentation Needed:

To claim the OPTSC applicants must submit:
1. the certificate of eligibility issued by Ontario Creates;
2. the completed Schedule 558, Ontario Production Services Tax Credit;
3. their T2 Corporation Income Tax Return for the year.
Certificate of Eligibility documentation:
1. Completed OPSTC Application;
2. Administration Fee;
3. Ontario Creates Waiver Declaration & Statement of Intent to Claim COVID-19 Extensions signed by an authorized signing officer (officer and/or director) of the corporation;
4. Ontario Creates Waiver Declaration & Statement of Intent to Claim COVID-19 Extensions;
5. Incorporation documents for the qualifying corporation;
6. Please complete and sign the Corporate Schedule for the applicant company with all the information requested on the form;
7. Production Services Agreement between copyright holder and qualifying corporation. If the production is domestic, please provide a copy of all signed final financing agreements;
8. Copy of the Official Designee Affidavit signed for purposes of the Federal Film or Video Production Services Tax Credit, if applicable;
9. Synopsis for the production (additional material may be requested);
10. Chain of title documentation (such as a legal opinion);
11. CAVCO Accreditation Certificate, if available
OR
CAVCO Part A Certificate, if available (domestic productions);
12. Cast List with names and residency addresses;
13. Crew List with names and residency addresses;
14. Production Schedule including start and end dates of preproduction, principal photography and post production;
15. Financing Plan for the production (for domestic productions);
16. Detailed Cost Report (if production has been completed) OR Production Budget;
17. Schedule of Final (actual) Ontario Qualifying Production Expenditures (if the production has been completed) OR Schedule of Projected Qualifying Production Expenditures. Please refer to the Qualifying Production Expenditures Calculation Form.

Other Things to Note:

As of August 24, 2023, the Government of Ontario made regulatory changes. These amendments implement commitments the government had previously announced to:
1. Extend eligibility for the film and television tax credits to productions released exclusively online, as announced in the 2022 Budget; and
2. Introduce a screen credit requirement as announced in the 2022 Economic Outlook and Review.
3. The FAQs and Guidelines will be updated in the coming weeks. Guidelines updated March 2022.
Date modified:2022-06-17 – Source2

About the author
mmuise