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Using Film Tax Incentives For Television, Animation and Film Finance in Canada

Guest post by: Stan Prokop

Article Overview: Potential Ways to Minimize financing challenges for film, tv and digital animation via tax credit financing. Information on how Producers, directors and owners of film, tv and animation on Canadian projects can utilize film tax incentives for film finance in Canada . Use tax credit finance to round out your projects financing .

Using Film Tax Incentives For Television, Animation and Film Finance in Canada

Most of the players here in Canada as well as in the U.S. seem to agree that the film, television and digital animation business has bounced back nicely in Canada. Film tax incentives in film finance (we’re of course talking about television and animation projects also) continue to play a strategic role in the challenge of cobbling together a full and successful finance package for projects.

The financing of your project seems the opposite of the glamour and dare we say it ' sexiness ' of the film and TV industry. The challenge clearly is to maximize financing while minimizing risk to investors and owners and Canadian tax credit incentives do just that. When these tax c credits are financed, or ' monetized ' they in fact supercharge the working capital and cash flow of your production.

Many parts of a project financing have what the financial analysts call ' unpredictable revenue streams ' via foreign sales, DVD sales, and of coruse the box office itself.

Why not therefore make some of those ' unpredictable' future cash flows very predictable with money from federal and provincial governments in Canada. As you are certified and approved for your projects your ability to finance the credits in the private sector simply enhances your productions chance of overall success.

Financing your tax credits in Canada essentially has you putting together a hybrid of equity, debt and tax credit financing which, done properly, allow your project to success from a financial perspective. (We won’t get into the entertainment or public acceptance merit of your projects!)

Whether you are a car manufacturer or a film producer, director, owner it’s all about ROI, return on investment. Leveraging your project from a tax credit incentive simply enhances ROI.

Canadian entertainment projects in film, TV and digital animation are very much ' blossoming ‘.

Even though the Canadian dollar has grown stronger the enhanced credits that have come into place in the last year or so simply are driving U.S. and foreign productions into Canada. Even Bollywood is looking at Canada!

Maybe Canada is a little boring and conservative when it comes to many other countries but being a stable country with a diverse filming geography and strong financial system offsets that Canadian ' boring ' personna quite well!

Single productions cannot apply for both the domestic film/tv credit and the production services tax credit - you are required to choose one or the other assuming you qualify. In many cases applications are being streamlined and even filed online in Canada.

Speak to a trusted, credible and experience film fax advisor to maximize the financing of your tax credits - they should no doubt enhance project success.

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Article Tags: film finance, film tax incentives, tax credit financing



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