BC’s Interactive Digital Media Tax Credit 2019
The Canadian Government provides tax credits for digital products such as educational software, simulators, game development and many more. Digital media tax credits are offered to eligible companies located in Alberta, British Columbia, Manitoba, Ontario, Quebec, Nova Scotia, and Prince Edward Island. Eligible companies are those who develop interactive digital media products or engage in the provision of eligible activities to such a business.
An interactive digital media product is designed to be used interactively by an individual and consists of application files and data files in a digital format and are intended to be operated together. These products are designed to educate, inform or entertain the user and present information in two of these forms: text, sound or images. Online magazines, blogs, videos, slideshows, video streaming applications or social media products that are not created to be used interactively do not qualify for the BC Interactive Digital Media Tax Credit.
The BC Interactive Digital Media Tax Credit provides a refundable tax credit on eligible salaries and wages invested in creating digital media products in British Columbia. This tax credit was introduced in 2010. The Interactive Digital Media Tax Credit may be considered as an alternative to BC’s provincial SR&ED incentive.
Eligibility Criteria for Corporations to Qualify for BC IDMTC Tax Credit
Eligible corporations or companies must meet the following criteria:
- Having a permanent settlement in British Columbia
- Is a taxable Canadian corporation or company throughout the year
- Registered with the BC Ministry of Finance for each financial year for which the IDMTC is claimed
- Has an amount of eligible salaries and wages greater than $100,000
- Involved in developing interactive digital media products or providing eligible activities to companies that have a permanent settlement in BC and develop interactive digital media products
The BC Interactive Digital Media Tax Credit is calculated as 17.5% of eligible salary and wages incurred in the financial year. A corporation is not eligible for the IDMTC for a given financial year it is exempt from taxes, has a registered employee share ownership plan, is a registered small business venture capital corporation, has a registered employee share ownership plan, claims a BC Scientific Research and Experimental Development (SR&ED) tax credit for the given financial year and has a personal service business. Stock options, amounts paid to employees in marketing, human resources, administration or management services and the amount paid to contractors or sub-contractors are excluded from salaries and wages while calculating the BC Interactive Digital Media Tax Credit.
When You Need To Submit An IDMTC Claim?
Like the SR&ED tax credit, you need to file this tax credit 18 months past the end of the financial year in which the eligible salaries and wages are incurred. The IDMTC is fully refundable.
If you’re looking for a professional BC IDMTC Tax Credit Consultant to claim an IDMTC, Vancouver R&D Services Inc. is here to help. We have several years of experience in science or technology and financial aspects of claims. Speak to us today and get your tax credit claim filed!