The Canadian Film or Video Production Tax Credit Program
What is the Canadian Film or Video Production Tax Credit?
- Introduced in 1995, the Canadian Film or Video Production Tax Credit (CPTC) encourages the creation of Canadian film and television programming and the development of an active domestic independent production sector.
- The CPTC is governed by section 125.4 of the Income Tax Act (ITA) and section 1106 of the Income Tax Regulations (ITR).
- The Minister’s authority under the ITA has been delegated according to legal rules of interpretation and a delegation instrument, to a senior official of Canadian Heritage.
- The Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency (CRA) co-administer the CPTC.
What are the responsibilities of CAVCO and the CRA under the Canadian Film or Video Production Tax Credit (CPTC) program?
- CAVCO is responsible for making evaluations and recommendations to certify audio-visual productions.
- The applicant can submit the certificate issued by CAVCO to the CRA when filing his or her income tax return in order to claim the tax credit.
- The CRA is responsible for reviewing tax returns and issuing refunds to the applicant.
What does CAVCO take into account in assessing an application?
- CAVCO issues program guidelines to assist applicants in preparing their submission.
- Applicants must demonstrate that:
- the company is Canadian-owned and controlled and is in the business of producing Canadian content productions;
- their producer-related personnel and a minimum number of key creative personnel are Canadian citizens or permanent residents;
- they have an agreement with either a Canadian broadcaster or a Canadian distributor to show the production in Canada within 2 years;
- their productions are not ineligible genres listed in the ITR: news/current events, talk shows, sports, game shows, galas, productions that solicit funds, reality television, pornography, advertising, corporate productions, or stock-footage other than a documentary;
- they meet the minimum Canadian production and post-production expenditure requirements;
- they have copyright ownership of the production.
How can an applicant challenge a certification decision?
- In cases where CAVCO determines that the production does not meet the requirements of the ITA or ITR, CAVCO notifies the applicant of the ineligibility of their production and provides the applicant with a 30-day notice period to submit any new information.
- Upon receipt of this information, CAVCO reviews the information and forms a final recommendation.
- The ITA does not provide for an appeal mechanism to challenge a certification decision.
- An applicant may challenge the final decision by filing a judicial review application with the Federal Court of Canada.
How does CAVCO make changes to program guidelines?
- When deemed appropriate, CAVCO posts proposals on its website to clarify or modify its program guidelines through call-for-comments public notices (PN), a process also used by the Canada Revenue Agency.
- All comments are reviewed and analyzed.
- Revised guidelines are posted on the CAVCO website.
How is CAVCO addressing the current situation with respect to talk show productions previously certified?
- In accordance with principles of procedural fairness, CAVCO is taking the following approach:
- informing the applicant concerned of its findings;
- recommending the certification of the applicant’s productions that are currently under review by CAVCO;
- recommending the certification of the applicant’s subsequent productions for which there is evidence that they may be underway or for which the applicant has a commitment to broadcast upcoming seasons;
- inviting the applicant to communicate with CAVCO to discuss any questions or concerns.
- In February 2016, CAVCO will launch public consultations to clarify the definitions of ineligible genres through a call-for-comments public notice (PN) posted on its website.
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