Film Television and Animation Tax Credit Financing – Canadian Solutions

Financing solutions and models continue being sought after within the Canadian film television and animation tax credit financing area. Additionally other working capital solutions for Canadian productions of this type may also be available and generally less referred to as with their existence and their capability to assist productions of Canadian content.

Early this year 2010, as is right now popular by most players on the market, the Canadian government at both federal and provincial level ‘super charged ‘ tax credit grants and incentives. Rates and credits increased for specified expenditures by around 5-10 % in most regions of these tax credits. Additionally a fund was even creating for Intellectual property, having a projected funding of ten million dollars.

Productions with Canadian content are aggressively being produced and savvy principals in Canada are both benefiting from these credits, and in addition financing them with an interim basis, or on completion.

A variety of private investing, government non repayable tax credits and also some participation by Canadian banks develop a ‘tour de force ‘of financing assistance for Canadian content. Although a substantial previous element in Canadian growth was the cheaper Canadian dollar even the dollar at par now have not hindered Canadian productions in every three key areas, film, television, and digital animation. (And let’s not forgot those less popular sisters – book publishing and music!)

Productions in Canada are needless to say financing very much the same as almost somewhere else – equity by owners, tax credits, loans, and distribution deals. The newest tax credit incentives in place replace film tax shelters of previous days. Inside our opinion this technique is more transparent, available, and requires a large amount of the negativity connected with ‘tax shelters ‘.

Just how do principals access tax credits and how do these tax credits be financed. Did additionally you understand that financing can be acquired with an interim basis also, so for properly documented productions it is possible to obtain interim financing assistance that oftentimes becomes an integral up front element of your financing and can enable you to complete assembling your project more advantageously from the financial perspective?

Which are the basics of the kind of financing – let’s review them. To state that film, TV and animation financing is really a boutique industry in Canada is needless to say an understatement. Because of this we strongly suggest that you use and talk with a skilled and knowledgeable advisor of this type. To gain access to financing you need to make sure your project or projects meet the criteria to become certified for just about any a number of from the six major tax credits that exist, for instance, in Ontario. (We shall use Ontario as our example, but each province has similar regimes to aid yourselves.) You need to make sure you have created an individual special purpose entity, basically the legal shell under which your production or project will undoubtedly be qualified.

Carefully choose which credits you’re qualified to receive, and make sure you make an application for proper certification at the earliest opportunity. Improper or incomplete certification only (as in virtually any business financing process) decreases and stalls your tax credit and the capability to finance it.

Maintain proper disbursement and payroll records – we strongly suggest to clients they work with a specialized accountant or firm of this type. When you can demonstrate your background and experience, have proper certification in process, and so are focused on document the project through completion by proper filing of taxation statements and financials your tax credit could be financed as immediately as when it’s accepted and provided to assembling your project. In the event that you seek interim financing for exactly the same project, and so are focused on maintaining and demonstrating the product quality in the main element fundamental areas noted above you’re qualified to receive accrual financing, or cashflow and working capital assistance immediately even before the certification of one’s project(S).

In conclusion, ‘Hollywood North’ is apparently booming again. The economy has found, consumers want entertainment in every key sectors, and also the Canadian dollar have not deterred investment in production. Tax credits have increased, and also even better, by dealing with the correct experienced partner your credits could be financing if they are certified, as well as earlier when you can document a solid move forward action anticipate disbursements, payroll, as well as your experience with this great section of the Canadian economy. And incidentally, speaking to a specialist in area doesn’t hurt – extra tips and assistance will probably be worth thousands or thousands of dollars in cashflow and working capital for the projects!

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