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Quebec Eases Multimedia Tax Credit Requirements 

Canadian Tax Adviser

 

October 08, 2013

 

Quebec has announced changes to the refundable tax credit for multimedia titles (general tax credit) and the refundable tax credit for corporations that specialize in the production of multimedia titles. Specifically, Quebec has expanded the eligible activities and abolished the time limit for the eligibility period for production work for these refundable tax credits. Quebec announced the changes in a four-page bulletin that applies to production work certificates submitted to Investissement Quebec after September 30, 2013.

Background
In general terms, a multimedia title is something that:

 

  • Contains three of the following types of information in digital form: text, sound, still images and animated images
  • Is published on an electronic medium
  • Is controlled by software allowing interactivity.

 

To take advantage of either the general tax credit for multimedia titles or the tax credit for specialized corporations available in Quebec, a corporation must apply to Investissement Quebec to obtain a qualification certificate for each multimedia title for which it intends to claim the credit. In addition, to be eligible for the tax credit for specialized corporations, a corporation must apply for a specialized corporation certificate attesting that at least 75% of its operations in Quebec consist of producing eligible multimedia titles. For both credits, the amount of the tax assistance from which the eligible corporation may benefit is generally determined by the amount of its qualified labour expenditure paid to its employees or to a subcontractor.

 

Previously, to be eligible for either credit, production work had to be carried out to complete the production stages of the title, and had to be carried out during the period that began at the design stage and ended 36 months after the completion date of the title's final version.

 

Changes announced
According to the bulletin, Quebec has abolished the previous 36-month period of eligibility for production work. This change applies to production work certificate applications submitted to Investissement Quebec after September 30, 2013.

 

Quebec further notes that the following activities are now eligible for both tax credits, (provided they do not pertain to a title's promotion or distribution):

 

  • The development of online multimedia titles
  • The development of the community of users
  • The position of game master, and seeking the enhancement of users' experience
  • Technical service to the community
  • Technological activities that do not constitute eligible production work under the current legislation.

 

For more information, contact your KPMG adviser.

 

 

 

 

 

Information is current to October 08, 2013. 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

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