YOUR COMPANY IS LOOKING FOR FILM / ANIMATION OR TV TAX CREDITS FINANCE SOLUTIONS!
FILM AND TELEVISION TAX CREDIT FINANCING
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Financing film, TV, or animation tax credit incentives in Canada is somewhat akin to masterminding successful productions in these three entertainment areas. Canadian federal government and the provinces provide these credits that are modelled closely to those tax incentives provided by other countries, particularly those Hollywood folks. Let's dig in.
WHY DOES THE GOVERNMENT FUND FILM AND TV AND DIGITAL MEDIA CREDITS?
The tax and employment benefits around movie, TV and digital animation projects have encouraged Canadian governments to provide some of the best funding available in the world. As an example, let's look at Production Services Tax Credit, which is just one incentive that is financeable.
FEDERAL / PROVINCIAL COMBINATIONS - CANADIAN FILM OR VIDEO PRODUCTION CREDITS
The federal portion of this credit (there is often both a federal and a provincial component to each type of credit) pays for 16%, as an example, of the labour on any project,
THE POWER OF FUNDING THE REFUNDABLE TAX CREDIT - CASH FLOW!
As we noted, the true power of cash-flowing refundable tax credits revolves around maximizing all that is available. In that case, producers/owners of projects should always consider the provinces' matching programs. In this case, the provinces (primarily Ontario / BC / Quebec - but pretty well all have credits available) actually compete very aggressively against each other for a piece of your action! Foreign producers have to choose then where they will film or produce their project in digital animation.
When it comes to Transmedia project utilizing all or in part animation, Ontario, Quebec and British Columbia have a very attractive
To make our point, combining the provincial program with the federal one can often pay for anywhere from 30 - 70% of your total labour cost on a production; Ontario's (again, as an example) animation credit is called ' OCASE ' and can be layered onto your applicable federal credits.
BUT WAIT - THERE'S MORE!
But wait, there's more! In certain cases, let's use Ontario as an example; if you film in a more distant location outside major metropolitan centres such as Toronto, additional credits are applied.
THE ROLE OF YOUR FILM TAX CREDIT ACCOUNTANT
The actual workaround preparing your tax credit for financing ( if you so choose to finance/cash flow the credit ) is really a combination of effort with a good film tax credit accountant as well as your lawyer, who typically on his or her part sets up a separate corporate entity for each project. Even where do principal photography can affect an increase in your tax credit claim, The tax accountant will ensure your firm has proper permanent establishment, and your corporation must be up to date in its financial statements. A lot of post production work for visual effects/ special effects is done in Canada and is qualified for tax credit funding via your Canadian-controlled legal entity .?
IT'S ALL ABOUT THE TAX CREDIT CERTIFICATE
It's typically your tax accountant, or lawyers work to get the actual tax credit certificate' and maintain the financials and legal filings just as they would for any other business type.
HOW DO FILM TAX CREDIT BRIDGE LOANS WORK?
So the actual cash flowing of these tax credits? We thought you would never ask! Refundable TV, film and animation credits can be financed at any time, i.e. before filing, after you file, or even after your project is completed. Typical advances on the credits are in the 70% range. The appeal to the producer /owner is that they help cash flow any current project or help you fund your next one. Further appeal arises around how these are financed - no monthly payments and structured as a temporary bridge loan.
CONCLUSION
Looking to financing your production services tax credit, transmedia digital credits, etc. - If you're interested in masterminding the financing of a film, TV or animation tax credit, seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you cash flow the credit.
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Stan Prokop
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