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Use Canadian Film Tax Credit Policy for Successful Financing and of Film , TV , And Animation Projects

Guest post by: Stan Prokop

Article Overview: Make tax credits in Canada work for your project ! Information on the Canadian Film Tax Credit Policy and how these non refundable credits can play a key role in your financing plan !

Use Canadian Film Tax Credit Policy for Successful Financing and of Film , TV , And Animation Projects

We can forgive non Canadian producers for not being up to date on Canadian film tax credit policy or the financing mechanisms available around film tax credit scenarios in Canada.

It's a little difficult to stay up to date on whets happening in the U.S., the U.K. and other parts of the world as it relates to the film tax credit part of the entertainment industry - that involves of course film, TV, and the last, but not least, rapidly growing digital animation industry.

But let's be clear on this - the film tax credit and its related credits are a major incentive to any producer planning to shoot or product a film television and animated feature in Canada . There is not a day when we dont receive a call from U.S. folks inquiring about the credit. (The key tax credit in question is called The Canadian Film and Video Production Services Tax Credit)

Similar to its foreign counterparts at it's simplest we can just say it's a major incentive to growth film TV and animation production in Canada. It's a financial incentive; it's as simple as that.

Prior to current systems and governance there was a perception that the tax credit application and funding system was cumbersome. We feel very comfortable in saying that feeling has gone away to the point where applications are actually submitted online.

The Canadian film tax credit is a refundable, non repayable credit that can play a very significant role in the overall financing of your project. Books are written around the challenges that independent producers face in putting together a complete financing package for their project. And don't even talk to us about the timelines involved in film finance!

But, imagine this, receiving anywhere from 30-45%, or more of your entire financing via the ultimate receipt, or monetization of your film tax credit. Haven't we just taken a huge piece of your financing challenge and workload away? The credits are heavily focused on labor expenditures; naturally the feds feel that employment in the industry is a very positive identifier for the program success.

We've referenced a number of times here the monetization of your film tax credit. Using the tax credit policy as a financing mechanism can help you cash flow your project and provide a decent part of the overall working capital you need. Tax credit film financing is a boutique industry in Canada, only a small number of players, and pricing and structures vary. A very small handful of Canada's largest chartered banks have boutique divisions that focus on this type of financing if you can meet general bank criteria. An even smaller number of firms finance the tax credits outside the bank.

So do we have anything against U.S. or other film tax jurisdictions? Absolutely not, but check into the Canadian scene in this area and we are positive it might be a driving factor in your decision to film or produce in Canada.

Seek a credible, trusted, and experienced Canadian business financing advisor in this area to help you put together a core team around the application, approval and monetizing of your credit.

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Article Tags: canadian film tax credit policy, financing



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