Ontario Computer Animation and Special Effects Tax Credit (OCASE) - Ontario Media Development Corporation

Content provided by Ontario Ministry of Economic Development

Program Responsibility:
Ontario Media Development Corporation, administered jointly with the Ontario Ministry of Revenue

Program Description:
The OCASE is a refundable tax credit for eligible Ontario labour expenditures incurred by a qualifying corporation for the taxation year with respect to eligible computer animation and special effects activities.

• The OCASE Tax Credit is calculated as 20% of the qualifying labour expenditures for the year incurred by a qualifying corporation.
• The OCASE Tax Credit may be claimed on eligible expenditures in addition to the Ontario Film and Television Tax Credit or the Ontario Production Services Tax Credit.

Eligibility Criteria:

Eligible Activities
Eligible computer animation and special effects activities are activities carried out in Ontario directly in support of the production of eligible animation or visual effects for use in eligible productions.

Eligible animation or visual effects means animation or visual effects created primarily with digital technologies but does not include:

• audio effects,
• in-camera effects, credit rolls, subtitles
• animation or visual effects all or substantially all of which are created by editing activities, or
• animation or visual effects for use in promotional material for a film or television production.

Eligible computer animation and special effects activities include designing, modelling, rendering, lighting, painting, animating and compositing but do not include activities that are scientific research and experimental development in nature.

Eligible Production
Eligible productions are productions produced for commercial exploitation which are not in an excluded genre or productions for which financial support would be contrary to public policy.

Qualifying Corporations
A qualifying corporation generally is a Canadian corporation that is Canadian or foreign-owned, has a permanent establishment in Ontario and is not exempt from income tax. The corporation must perform at a permanent establishment located in Ontario operated by it, eligible computer animation and special effects activities either for its own production or under a contract with the producer of the production.

Eligible Labour Expenditures
Qualifying labour expenditures are a) salaries and wages (i.e., amounts paid to employees) directly attributable to eligible activities carried on by the qualifying corporation, that are paid to Ontario residents (individuals resident in Ontario at the end of the previous calendar year) who report to a permanent establishment of the qualifying corporation in Ontario at which the eligible activities are carried out; and b) 50% of remuneration incurred after May 4, 1999 paid to freelancers with respect to qualifying activities performed in Ontario.

The labour expenditures must be incurred in the taxation year for which they are being claimed or the previous taxation year, and paid in the taxation year or within 60 days after the end of the taxation year.

Effective for productions commencing after March 22, 2007, a wholly owned subsidiary is eligible to claim reimbursements made to the parent corporation for eligible labour expenditures incurred by the parent corporation in respect of the subsidiary production.

Program Category:
Digital Media

Contact Information:
For questions regarding eligibility:
Ontario Media Development Corporation
175 Bloor St. E., Suite 501
South Tower
Toronto ON M4W 3R8
Tel: (416) 314-6858
Fax: (416) 314-6876
Email: taxcredits@omdc.on.ca
Website: http://www.omdc.on.ca/Page3402.aspx

For all other enquiries:
Canada Revenue Agency
Tel: 1-800-959-5525

Last Reviewed:
May 2010/AW