Canada Revenue Agency
www.cra.gc.ca
Common menu bar links
Film or Video Production Services Tax Credit (PSTC) Program – Summary
Under this program, the federal government provides incentives to stimulate job growth by encouraging Canadians as well as foreign-based film producers to employ the services of Canadians.
Who qualifies?
To qualify for the PSTC program, the applicant must be an eligible production corporation that carries on through a permanent establishment in Canada a business that is primarily a film or video production business, or a film or video production services business. Specifically excluded are prescribed labour-sponsored venture capital corporations, tax-exempt corporations and corporations controlled by one or more tax-exempt persons. In addition, the corporation must either:
- own the copyright in the film for which a claim is being made; or
- have contracted directly with the owner of the copyright, where the owner of the copyright is not an eligible production corporation.
Rate
This refundable tax credit is provided to an eligible production corporation at the rate of 16% of its qualified Canadian labour expenditures, net of any assistance, in respect of an accredited production for services rendered in Canada by Canadian residents.
What kind of production qualifies?
To receive the PSTC, an eligible production corporation must obtain an accredited film or video production certificate from the Canadian Audio Visual Certification Office (CAVCO) in respect of an accredited production. The accredited production must meet a cost minimum and it must be of a genre other than those listed at section 9300 of the Income Tax Regulations (the Regulations). A special rule prevents producers from claiming both the Canadian Film or Video Production Tax Credit (CPTC) and the PSTC with respect to the same production.
Administration
CAVCO and the CRA jointly administer the PSTC.
CAVCO is responsible for:
- confirming that a production is an accredited production (AP);
- confirming the copyright owner of the AP;
- issuing accredited film or video production certificates (Accreditation Certificate) so that Canadian producers can claim the PSTC.
CRA is responsible for:
- helping applicants ;
- interpreting and applying section 125.5 of the Income Tax Act (the Act) and all other provisions in the Act and Regulations that may have an impact on the tax credit;
- reviewing tax credit claims;
- assessing T2 Corporation Income Tax Returns;
- issuing timely refund cheques.
How do taxpayers apply?
To apply for the PSTC, an eligible production corporation must complete Form T1177, Claiming a Film or Video Production Services Tax Credit. The certificate issued by CAVCO, or a copy, must be attached to the T2 Corporation Income Tax Return for the year along with Form T1177 (attach these documents to the top of the T2 return for early identification by the CRA).
