Creative Finance Techniques That Actually Work in Film Tax Credit Financing in Canada
In case your production in film, television or digital animation requires financing then Film Tax Credits in Canada are solid methods to augment your general finance plan. To be able to finance your credits your tax credit certificates must obviously be eligible for a Canadian content within the appropriate groups and should fulfill the rules put down by Ottawa as well as your province in accordance with personnel and production costs.
Within the last couple years the federal government makes a commendable effort to streamline the applying approaches for film tax credits so we must help remind readers these credits apply equally towards the television and digital animation areas.
Within the digital animation areas you could also be qualified for SR&Erectile dysfunction credits under what is known the Research and Experimental Development program. This is undoubtedly Canada’s largest program for tax credits, far surpassing the show, TV and animation area
Financing of productions can be quite traditional or very creative, but certainly tax credits can enjoy a vital role either in total finance strategy. Typically productions are financed within the following manner: Non studio producers, i.e. the independents arrange distribution and pre-sales from the project. Typically you’re getting into a contract to own other party the legal rights to show your production via TV, DVD, etc for the reason that particular geography.
Many pre-sales budgets we view show a finest situation and worst situation pre-sales scenario. The pre-purchase financing are, essentially, promissory notes for your special purpose entity with this production. The following financing challenge would be to ‘finance’ individuals offers to pay for several different finance entities, including banks, specialized firm finance firms in Canada, etc. In Canada two or three from the nations banks are somewhat positively involved in this region – while some shun the as excessive risk for traditional lending.
You obviously will also be needed to publish a completion bond covering cost over runs and also the ultimate completing any project.
Film tax credit financing is among the final aspects of your general finance strategy. Your tax credit is, in Canada, essentially a government subsidy, why should not you make the most of it. Tax credits finance a really large number of what’s known in the market because the ‘below the road ‘budget. They are, essentially, your own personal production expenses.
You thus need to ensure your production qualifies for the best expenses, and frequently individuals are validated by a cpa or firm with entertainment accounting experience. Through the use of a Canadian actor component, in addition to technicians along with other sources you’ve set any project as much as both entitled to the tax credits, and, then more particularly to income or sell these credits.
To be able to finance your credits you ought to have a general finance plan, along with a technique for the equity and debt aspects of your production. Validate your budgets and be sure your productions possess the needed ‘points’ to be able to qualify. Film tax credits could be financed on filing, or, more popularly, while you spend funds, that are then reimbursed through the tax credit financing.
Make contact with a reliable, credible, and experienced film tax consultant around what you can do to maximise and take advantage of this critical strategy within ‘Hollywood North’, also known as Canada!