Canadian Tax Adviser, May 10, 2016 British Columbia recently introduced legislation to reduce its provincial film tax credit rates. If enacted as proposed, the basic production services tax credit rate will drop to 28% (from 33%) and the digital animation or visual effects tax credit will drop to 16% (from 17.5%), where principal photography begins on or after October 1, 2016. However, the measures include a transitional period to recognize investments which have already been planned in the province. For example, the amendments will allow all episodes in one season of a television series to continue at the current tax credit rates if principal photography for the first episode of the series begins before October 1, 2016.
The B.C. film credit reduction is included in Bill 25, which received first reading on May 2, 2016, and is considered to be substantively enacted for purposes of IFRS and ASPE as of this date (since British Columbia has a majority government). Bill 25 contains no other income tax measures.
As part of the 2016 B.C. budget, the province announced its intention to consult with representatives from the film and television industry to address the rising cost of the province's production services tax credit for film and television. The proposed adjustments to the B.C. film tax credits are the result of these consultations and are intended to provide certainty to the film industry, while keeping the subsidy affordable for the government.
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Information is current to May 10, 2016. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500