The Ontario government announced this fall that the Ontario
Interactive Digital Media Tax Credit (OIDMTC) program is under
review as the program has seen a rapid increase in the number of
claims in recent years, with a 40 percent annual growth rate in
support claims processed. The potential changes in the program may
affect the type of businesses that can apply for the tax credit, as
well as reducing the rate at which the OIDMTC is earned. With a
decision expected in spring 2015, businesses that are currently
eligible for the OIDMTC should plan to file as soon as possible
prior to the implementation of these changes.
In addition to the OIDMTC program, an array of tax credits are
offered by the Canadian and Ontario government to assist companies
that drive innovation in their industries. Companies that qualify
for the OIDMTC may also be eligible for the federal and provincial
Scientific Research and Experimental Development (SR&ED)
investment tax credit program. Under the SR&ED program,
eligible private companies can receive over 60 percent of
qualifying expenditures as a cash refund.
About the Ontario Interactive Digital Media Tax Credit
Committed to developing an innovation-focused economy supported
by a highly skilled workforce, the provincial government introduced
the Ontario Interactive Digital Media Tax Credit (OIDMTC) in 2000.
This incentive has promoted the interactive digital media industry
and attracted significant investment in innovation. The OIDMTC
provides refunds of up to 40% of eligible amounts, which may
include Ontario labour, marketing and distribution expenditures.
Initially introduced to assist the games development industry, the
OIDMTC has since grown to encompass online publishers, financial
institutions and multinationals that produce interactive media.
To qualify, a Canadian corporation must operate a permanent
establishment in Ontario, it must file an Ontario tax return, and
it must develop a product that fulfills the following criteria:
An interactive media product that educates, informs or
Presents information combining at least two of the following
channels: text, sound and images.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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