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Independent Film Financing via a Film Tax Credit Finance Strategy

Guest post by: Stan Prokop

Article Overview: Film, Television, and Digital Animation tax financing in Canada ;Information on how owners of Canadian productions in film, television and digital animation can recoup significant financing costs via the utilization and monetization of government tax credits prior to and pre-filing in some cases.

Independent Film Financing via a Film Tax Credit Finance Strategy

One of the best lines we have ever read on our subject of film financing for Canadian productions is as follows, and we attribute it to on of Hollywood's more astute observers and reporters on this subject - the line is as follows:

'Have you ever wondered why the U.S. looks like Canada in the Movies? ' !!

We love that line and the answer to that question mostly revolves around 3 words - Tax Credit Financing.

Whether or not you subscribe to the idea that independent ( ' indie ' ) film financing, (and of course we are talking about independent televison project financing also ) is dead our basic point is simply that tax credit filing, and the financing of those tax credits has never been more popular than in the current environment in Canada - 2010 .

Tax credits can finance a very significant portion of your production, in particular whats known as ' below the line ' budgets. By employing a specific quota of Canadian actors and resources and filming locations, and utilizing the point system in place, you can recover a large amount of costs, and, if you choose you can finance your tax credit claim prior to receiving a final cheque from the government.

The key tax credit involved is of course the ' Film Production Services Tax Credit ', which covers a large portion of labour cost. As great and in some cases greater per cent age amounts can be recovered on digital animation projects related to your production, or as separate entities themselves. Some of the basic rules are that key personnel such as actors and directors must be from Canada. Several thousand products have been done in Canada - no one can of course say that tax credits were the sole reason for these productions, but we can venture to say they were in many cases a primary decision driver.

As industry professionals and participants are aware of some of the key elements of financing your project - those include proper budgeting and accounting via reputable staff and parties.

Revenue and cash flow, pre and post production comes from foreign pre sales, your own equity, bridge loans, gap financing, and of course tax credit financing.

How are tax credits financing in film, TV, and digital animation. Your project of course must be certified and eligible for the credit being financed - that is only common sense. It also makes sense to have a separate legal entity in place for each project - the lawyers call this a ' SPE ' - Which stands for Special Purpose Entity.

It is critical to work with an experienced, credible, and trusted tax credit financing advisor, lets call he, she, or it the ' Film Financing Company '. Film financing sources are a great way to finance your projects. Your credit can be cash flowed, or ' monetized ' when it is filed, and, if you have some credibility and good accounting and up to date filings for your project you might be surprise to know you can receive funds, via a loan, prior to the actual filing.

Utilized available and popular tax credits as a solid source of your overall project financing strategy for your independent film, television show or series, or a digital animation project.

Related Articles
  Looking For Canadian Tax Credits For Film Financing?
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  Why the financing film tax credits provides ‘real’ film tax breaks and film tax incentives to your project
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  How to Finance a Film ,TV , or Animation Project Via a Film Tax Credit Film Financing Strategy
  Why The Canada Film Tax Credit Program Is Critical To Your Film Financing
  Cash Flowing your B.C. and Ontario film grants – Film Financing Canada and Tax Credit Financing
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  How to Finance Production Tax Credits in Film, Television and Digital Animation in Canada

Article Tags: film tax credit finance, independent film financing



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