X-Men Portal

Service Production

The refundable tax credit for film production services is designed to stimulate job creation in Québec, essentially by encouraging foreign producers to choose Québec as a filming location. This credit is a source of new capital and generates significant economic spinoffs for crafts people and companies in Québec. Some local producers may also claim the tax credit.

Basic Rate :

20% All-spend production costs including qualified labor and the cost of qualified properties and services* 

Bonus :

16% Labor-based computer-aided special effects and animation & Shooting of scenes in front of a chroma-key screen activities*

Minimum Production Costs Requirement

The minimum production costs requirement is $250 000 or more:
  • in the case of a film that is part of a series or miniseries, the production costs of the series or miniseries;
  • in other cases, the production costs of the film.

Categories of Eligible Production (Features And Series)

  • All fiction, including films consisting entirely of sketches each of which is drawn completely from a screenplay and that are designed and put together specially for television. (including series and miniseries);
  • Documentaries lasting a minimum of 30 minutes of programming or, in the case of a series, 30 minutes of programming per episode, excluding documentaries intended for minors, which may be shorter.
Eligible films or documentaries include virtual reality (VR) or augmented reality (AR) productions. A VR or AR production offered for free, without being deemed advertising, is eligible to the tax credit for film production services if it is an original production or an extension or supplement to another production that aims to provide additional information or entertainment for the main production.

Eligible Corporation

  • Corporation established in Québec whose activities are primarily in film and television business.
  • Corporation does not have to be controlled by Québec residents.

Excluded Corporation

  • Tax exempted corporation.
  • Controlled by Tax exempted corporation.
  • Holder of a broadcasting licence issued by the CRTC or corporation that is not at arm’s length to a corporation which holds such a licence. 

Eligible Production Costs

Eligible costs consist of all-spend production costs including qualified labor costs and qualified properties and services incurred in Québec regarding a qualified production.

Labor Costs

Qualified Labor Costs

  • Wages and salaries (including the associated payroll taxes incurred)
  • Service contract incurred by the corporation with a supplier of services
  • Wages for some Below-the-Line position from out-of-state could qualify as local labor. (some restriction applies)
  • Service

Not Qualified Labor Costs

  • Wage or salary directly or indirectly regarding: Producer, author, scriptwriter, director, production designer, director of photography, music director, composer, conductor, editor, vfx supervisor, actor or an interpreter.

The individual could be qualified only if that person resides in Québec at the time when the services are provided in the course of the completion of the qualified production.

 Qualified Properties

  • Costs incurred by corporation regarding the acquisition or rental of equipment in Québec
  • Costs incurred by corporation regarding the acquisition of tangible properties, in relation to a qualified production
  • Includes airfare, per diem, bond, insurance purchased in Québec.

Delivery Agency

SODEC manages the two-stage administrative procedure

Approval Certificate

Certifies the eligibility of the production and is delivered to a corporation that is the owner of the copyright throughout the period during which the production takes place in Québec.

 Required Documentation

  • Application form duly completed by the copyright owner or his official designee
  • Official notarized designee affidavit (where applicable)
  • Complete chain-of-title documentation or detailed legal opinion
  • Synopsis
  • International budget summary
  • Québec budget
  • SODEC administrative fees.

Advance Ruling

Delivered either to the owner of the copyright or, where the owner is not an eligible corporation, to any eligible corporation that is under a direct contractual link with the owner of the copyright and provides services in Québec regarding the eligible production.

 Required Documentation

  • Application form duly completed
  • Copy of the Approval Certificate related to the production
  • Contract directly entered with the owner of the copyright for the delivery of production services in Québec
  • For Québec CGI corporations that have entered into a contract of a maximum value of $1,5M CAD, a notarized confirmation of copyright ownership will suffice
  • Cast & crew list
  • Québec budget including detailed labor and properties
  • Contracts related to computer animation and special effects activities
  • Schedule related to the shooting of scenes in front of a chromaticscreen activities
  • Sodec administrative fees

 User Fees

  • $ 4.00 CDN per each $ 1 000 CDN of eligible expenditure (including labor) up to $ 1 500 000 CDN
  • $ 3.00 CDN per each $ 1 000 CDN of eligible expenditure (including labor) over $ 1 500 000 CDN
  • Minimum: $ 1 000 CDN Maximum: $ 25 000 CDN
  • Certificate Agreement: $ 500 CDN flat fee

 Joint Roles of SODEC and REVENU QUÉBEC

  • SODEC validates the production conformity and issues the certificates of eligibility (Approval Certificate and Advance Ruling)
  • Applications must be filed with SODEC before the end of the taxation year in which the eligible corporation wants to claim with REVENU QUÉBEC
  • REVENU QUÉBEC validates the eligibility of the corporation, ascertains the costs claim and refunds the tax credit. The eligible corporation must file the Advance ruling letter issued by SODEC along with its corporate tax return in order to obtain the refundable tax credit.

 

Federal Tax Credit Program

The refundable federal tax credit for film production services is designed to stimulate job creation in Canada, essentially by encouraging foreign producers to choose Québec as a filming location. This credit is a source of new capital and generates significant economic spinoffs for crafts people and companies in Québec.

Basic Rate

16% of the Canadian labor expenditures*

Eligible Corporation

  • Taxable Canadian permanent establishments whose primary business is film or video production or production services in Canada

Project Criteria

Feature Total Film Budget  $1M CAD
(not necessarily what is spent in Canada)  
TV Series 30 min. or less
31 min. and over  
$100 000 per episode 
$200 000 per episode 

 

Delivery Agency

Canada Revenue Agency

User Fees

$ 5 000 CDN flat fee with, a rebate allowable for productions whose aggregate tax credit is less than $ 25 000 CDN.


* Contact the QFTC for more information