Refundable tax credit of 18% on local Ontario labour costs related to the creation of computer animation and special effects for use in film and television.
The OCASE Tax Credit is a refundable tax credit based on eligible Ontario labour expenditures incurred by a qualifying corporation during a taxation year with respect to eligible computer animation and special effects activities. The OCASE Tax Credit may be claimed on eligible expenditures in addition to the Ontario Film and Television Tax Credit (OFTTC) or the Ontario Production Services Tax Credit (OPSTC).
HOW MUCH IS THE TAX CREDIT?
The OCASE Tax Credit is calculated as 18% of the eligible Ontario labour expenditures incurred by a qualifying corporation with respect to eligible computer animation and special effects activities. There is no cap on eligible Ontario labour expenditures.
WHO IS ELIGIBLE?
A qualifying corporation is a Canadian corporation that is Canadian or foreign-owned, has a permanent establishment in Ontario and files an Ontario corporate tax return. Qualifying corporations may include animation or visual effects houses, post-production houses and film and television production companies which perform eligible computer animation and special effects activities.
WHAT IS AN ELIGIBLE PRODUCTION?
Eligible productions are productions created for commercial exploitation, which are not in an excluded genre, or for which financial support would be contrary to public policy. The production must also have received an OFTTC or OPSTC certificate to be eligible for the OCASE tax credit.
WHAT ACTIVITIES ARE ELIGIBLE?
Eligible computer animation and special effects activities are those carried out in Ontario directly in support of the production of eligible animation or visual effects for use in eligible productions.
Eligible animation or visual effects means animation or visual effects created using digital technologies but does not include:
- audio effects
- in-camera effects
- credit rolls
- animation or visual effects all or substantially all of which are created by editing activities, or
- animation or visual effects for use in promotional material for the eligible production
Eligible computer animation and special effects activities include designing, modelling, rendering, lighting, painting, animating and compositing but do not include activities that are scientific research and experimental development.
WHAT EXPENDITURES ARE ELIGIBLE?
Qualifying labour expenditures are;
- a) salaries and wages (i.e., amounts paid to employees) directly attributable to eligible activities carried on by the qualifying corporation, that are paid to Ontario residents (individuals resident in Ontario at the end of the previous calendar year) who report to a permanent establishment of the qualifying corporation in Ontario at which the eligible activities are carried out;
- b) freelancers who are individuals, partnerships, or arm’s-length incorporated individuals (such as loan-out corporations).
The labour expenditures must be incurred in the taxation year for which they are being claimed and paid in the taxation year or within 60 days after the end of the taxation year.