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Canadian film tax credits for film, video, TV, and animation. Can the Production Tax Credit solve the mistaken emphasis that producers and project owners sometimes find themselves in as they try to put together the 'money machine' required to finance their project?
Financing television, movies and animation / transmedia projects has certainly changed from the days of our aforementioned ' talkies' and 'cartoons'... that's for sure.
We're pretty sure that the majority of producers and owners of projects worldwide by now have heard that that Canadian film tax credit system seems by far one of the most sought after methods of making a film in the world. Canada's stable economy, sound financial system, as well as its diverse geography make it a solid choice to film or produce your project.
And let's also not forget Canada's diverse geography which lends itself to numerous genres of entertainment. Specifically in the world of animation and transmedia Canada's developers are again 'sought' by producers all over the world. The bottom line, Hollywood and Vine often quickly becomes Yonge and Dundas for those familiar with Toronto Ontario's major downtown intersection.
So what is the Canadian film production tax credit? We suppose we can't disagree with those that call it a 'government subsidy' - but for any form of finance that might cover 30-50% of your entire budget we're not going to quibble over semantics. ‘Show me the Money' and 'Go Where the money is‘ clearly has project owners flocking to Canada.
Any form of business financing is difficult. Film and animation finance certainly has its challenges, so if there is a vehicle that finances, on a non-payable grant basis a very significant part of your project when it comes to the 'below the line' portion of your budget.
And our key point today is that tax credit can be financed, or sold, as long as you have a clean chain of title. The technical term for the non-payable tax credit is the 'FILM PRODUCTION SERVICES TAX CREDIT'. Although some of Canada’s ten provinces change the formula a bit regarding the percentage of allowable credit the bottom line still is that the tax credit is hefty in anyone’s view.
We are often asked how the tax credit is calculated. It's essentially a percentage (as we referred to above) and point system based on the amount of Canadian talent and ' spend' on your project. That amount is best, in fact only determinable by a good entertainment tax account who applies on your behalf for your certification. That’s why over the last ten years well over 2000 projects have been done in Canada under the genres of film, TV, animation, and the new kid on the block, 'Transmedia'.
One Hollywood entertainment critic maintained that the even broader appeal of the Canadian film tax credits was in fact Canada's 'depressed loonie ‘, i.e. the colloquial term for the Canadian dollar. While the dollar was very weak against the U.S. dollar for a long time it now has essentially parity with the U.S. dollar, so that certain eliminate that logic for the present time.
The financing of your production tax credits is a simple process if you've got a solid team in place when it comes to being able to demonstrate you have covered off the additional debt and equity required by any project. Film tax credits can be cash flowed at the end of your project, or during, allowing for solid working capital and cash flow enhancement.
Speak to a trusted, credible, and experienced Canadian business financing advisor who can assist you in the preparation and financing of your financeable Canadian film tax credits. You'll find it reduces a lot of stress and won't have you 'tree barking wrong up' when it comes to putting your project together from a finance perspective.
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