CO-1029.8.35, Tax Credit for Québec Film Productions

The tax credit for Québec film productions may be granted to a corporation for the qualified labour expenditures that it incurs and pays for the production of a Québec film in respect of which the Société de développement des entreprises culturelles (SODEC) issued a certificate or a favourable advance ruling, as applicable.

This tax credit is refundable. To obtain the credit, a qualified corporation must file an income tax return and Form CO-1029.8.35, Application for a Tax Credit for Québec Film Productions. The form must be completed for each film or television production for which the credit is claimed. The amount of the credit will be applied to the balance of any income tax owing by the corporation.

Base rates and rates of increase effective for eligible productions after December 31, 2008, and before June 5, 2014

	Base rate	Increase for computer animation and special effects	Regional increase	Increase for no public financial assistance (1)	Maximum tax credit rate	Labour expenditure cap	Effective rate (2)
	As a % of labour expenditure					As a % of production costs	Minimum	Maximum
Certain French-language productions, including young productions	45	n.a.	10	10	65	50	22.5	32.5 (3)
Giant-screen productions	45	n.a.	10	10	65	50	22.5	32.5 (3)
Other productions	35	10	20	10	65 (4)	50	17.5	32.5 (5)

1. This increase applies to Québec film and television productions that are fiction feature films or single documentaries that do not receive any financial assistance granted by a public organization.
2. The effective rate is obtained by multiplying the rate of the tax credit, expressed as a function of a labour expenditure, by the rate of the cap, expressed as a function of production costs.
3. To determine the maximum effective rate, it is assumed that the labour expenditure that gives rise to the base rate also gives rise to the additional rates for regional production and for the increase where there is no public financial assistance.
4. Where all or part of the labour expenditure gives rise to more than one increase, the total cannot exceed 65%.
5. To determine the maximum effective rate, it is assumed that the labour expenditure that gives rise to the base rate also gives rise to the additional rate for regional production and, as the case may be, the additional rate for computer animation and special effects or the increase where there is no public financial assistance.

 

Base rates and rates of increase effective for eligible productions after June 4, 2014, and before March 27, 2015

	Base rate	Increase for computer animation and special effects	Regional increase	Increase for no public financial assistance (1)	Maximum tax credit rate	Labour expenditure cap	Effective rate (3)
	As a % of labour expenditure					As a % of production costs	Minimum	Maximum
French-language or giant-screen productions	36	n.a.	8	8	52	50	18	26 (4)
Other productions	28	8	16	8	52 (2)	50	14	26 (5)

1. This increase applies to Québec film and television productions that are fiction feature films or single documentaries that have not received any financial assistance from a public organization.
2. Where all or part of the labour expenditure gives rise to more than one increase, the total cannot exceed 52%.
3. The effective rate is obtained by multiplying the rate of the tax credit, expressed as a function of labour expenditure, by the rate of the cap, expressed as a function of production expenses.
4. To determine the maximum assistance, it is assumed that the labour expenditure giving rise to the base rate also gives rise to the regional increase and the increase for no public financial assistance.
5. To determine the maximum assistance, it is assumed that the labour expenditure giving rise to the base rate also gives rise to the regional increase and, as the case may be, for computer animation and special effects or the increase for no public financial assistance.

Base rates and rates of increase effective for eligible productions after March 26, 2015

	Base rate	Increase for computer animation and special effects	Regional increase	Increase for no public financial assistance	Maximum tax credit rate	Labour expenditure cap	Effective rate
	As a % of labour expenditure					As a % of production costs	Minimum	Maximum
French-language or giant-screen productions that are not adapted from a foreign format	40	n.a.	8	8	56	50	20	28
French-language or giant-screen productions that are not adapted from a foreign format	36	n.a.	8	8	52	50	18	26
Other productions that are not adapted from a foreign format	32	8	16	8	56	50	16	28
Other productions that are adapted from a foreign format	28	8	16	8	52	50	14	26

1. The notes of the preceding table apply with the necessary adaptations to this table.

Base rates and rates of increase effective for eligible productions after March 28, 2017

	Base rate	Increase for computer animation and special effects	Regional increase	Increase determined by public financial assistance (1)	Maximum tax credit rate (2)	Labour expenditure cap	Effective rate (3)
	As a % of labour expenditure					As a % of production costs	Minimum	Maximum
French-language (4) or giant-screen productions that are not adapted from a foreign format	40	n.a.	10	16	66	50	20	33 (5)
French-language or giant-screen productions that are not adapted from a foreign format	36	n.a.	10	16	62	50	18	31 (5)
Other productions that are not adapted from a foreign format	32	10	20	16	66	50	16	33 (6)
Other productions that are adapted from a foreign format	28	10	20	16	62	50	14	31 (6)

1. The 16% rate applies to a film or television production that is a feature film of fiction or a stand-alone documentary that has not received any financial assistance from a public body. The increase is now available for a production receiving financial assistance granted by a public body, and the rate is reduced linearly according to the amount of financial assistance granted by such a public body to the eligible production.
2. Where all or part of the labour expenditure gives rise to more than one increase, the total cannot exceed 66% for productions that are not adapted from a foreign format and 62% for production that are adapted from a foreign format.
3. The effective rate is obtained by multiplying the rate of the tax credit, expressed as a function of labour expenditure, by the rate of the cap, expressed as a function of production costs.
4. The following productions are eligible: feature-length, medium or short films of fiction (including co-produced feature films), stand-alone documentaries (including co-productions intended primarily for French-language markets, as well as productions intended for minors).
5. To determine the maximum assistance, it is assumed that the labour expenditure giving rise to the base rate also gives rise to the regional increase and the increase for no public financial assistance.
6. To determine the maximum assistance, it is assumed that the labour expenditure giving rise to the base rate also gives rise to the regional increase and, as applicable, the increase for special effects and computer animation or the increase for no public financial assistance.

The salaries and wages claimed for the credit must have been incurred with regard to individuals who were resident in Québec at some time during the taxation year in which the services were rendered.

Where an employee of a subcontractor provides services, the employee must be resident in Québec at some time during the taxation year in which the services are rendered.

The computer-aided special effects and animation expenditures must be reasonably attributable to services rendered in Québec by individuals resident in Québec at some time during the taxation year in which the services were provided.