Blog
June 13, 2023
Canada is home to many digital innovation giants and fast growing SMBs and start-ups. Canada’s federal and provincial governments offer some of the most generous incentives in the world to support this rapid growth and encourage investments in the country. The refundable tax credit for interactive digital media is available in various provinces across Canada. In each province, the rates and conditions for claiming the credit differ from one province to another, particularly concerning the wage expense per individual and the total eligible expenses that are not capped.
Contact us today to find the tax credit related to your province and let us help you maximize the most of it.
| Province | Refundable Tax Credits | Rates |
| Ontario | Ontario Interactive Digital Media Tax Credit (OIDMTC) |
40% products developed for commercialization and the property rights are owned by the company claiming the tax credit. If this is not the case, the 35% rate applies because it is a service contract with which the company meets the needs of another company. Eligible expenses are wages, marketing expenses and distribution expenses. |
| Quebec | Quebec Multimedia Tax Credit (CTMM) |
37.5% eligible production expenses as well as eligible production costs. Eligible multimedia titles include video games, websites, mobile applications, and other interactive digital media products that meet certain criteria. |
| British-Columbia | Interactive Digital Media Tax Credit (IDMTC) |
17.5% is applicable. Eligible expenses are labor wages. |
| Manitoba | Manitoba Interactive Digital Media Tax Credit (MIDMTC) |
Certain conditions apply to wages. The 40% wage expense rate applies only if 25% of the total wages paid by the business are wages for Manitoba residents. If this is not the case, then the 35% of eligible expenditures rate applies if the total wage expenditure exceeds at least $1 million and the business has not received any other financial grants. The province also considers subcontracting expenses. |
| Nova Scotia | Digital Media Tax Credit (DMTC) |
Salary expenses can be financed up to 50% + 10% bonus. Other expenses can be funded as long as the expenses are incurred within the province ( 25% of project costs + 5% bonus) |
| Prince Edward Island | PEI Labor Rebate | The program is also eligible for other industries. The PEI Labor Rebate can fund up to 25% of wage expenses for residents of the province. Wages must be at least $35,000 per year. Projects must be for a maximum of one year. |
| Newfound and Labrador | Newfoundland and Labrador Interactive Digital Media Tax Credit (IDM) |
40% rate applies to salary expenses and 65% to subcontracting expenses. The value of the tax credit is capped at $40,000 per employee and $2 million per company. |
Digital media tax incentives are offered by many countries to encourage the growth of their digital media industries. These incentives can help companies offset the costs of developing digital media products and services, which can be expensive. They can also help countries attract foreign investment and create jobs. In addition, digital media tax incentives can help countries remain competitive in the global marketplace. Countries such as France, Australia and Germany are also generous, but they severely restrict the amounts and rates of tax credit funding.
ABGI operates worldwide and enable to support multinational companies based on your needs, contact us to maximize your claims.
| Country | Rates |
| France ABGI France |
30% with a maximum of €6M per project. |
| Germany PFIF (Joint venture) |
The rate varies between 25% and 50%. The rate of the refundable credit decreases according to the development cost of the project. |
| United Kingdom ABGI UK |
Their new games tax credit will have a rate of relief of 34% on 80% of qualifying expenditure. |
| Australia CharterNet Rothsay (Partner) |
30% but a cap of $20M per company per year applies . Different states have different incentives. |
| United States ABGI USA |
US does not need a federal tax offset for video game development given that it is already the home of much of the global video games industry. However, some states such as New Mexico for example , has the refundable tax credit worth up to 35% of production costs is available to game developers to lure the game studios from the game sector’s base California. |
