The OIDMTC is a refundable tax credit for Canadian corporations developing interactive digital media products whose primary purpose is to educate children under 12 or entertain the user. The program offers a credit on eligible Ontario labour expenditures and, potentially, marketing and distributing expenses between 35-40% of costs.
What’s Eligible for the OIDMTC?
To be eligible for the OIDMTC, the interactive digital product must:
- Have a primary purpose of educating children under 12 or entertaining the user;
- Use two of text, images, or sound;
- Be used by individuals;
- Have 80% of the development work performed in Ontario by Ontario taxpayers
- Have a revenue-generating stream
The business must also have permanent establishment in Ontario.
The product could be, but isn’t limited to:
- Digital games
- E-learning products
- Mobile applications
What isn’t eligible
Products that aren’t eligible:
- Content provider products such as news, public affairs, opinion, commentary and/or advice
- Job training products
- Databases such as real estates or recipes
- Products created with the key objective of promoting products, services, or companies
- Reference material products such as software user guides, dictionaries, and maps
- Search engines
- Products used primarily for interpersonal communication
- Content aggregators
- Operating systems software
Other Provinces with Digital Media Tax Credits
Not a resident of Ontario? Did you know that several Canadian provinces offer Digital Media Tax Credits? Besides Ontario, these include Quebec, Nova Scotia, and British Columbia.
Keep in mind that each has its own distinct rules and regulations. A product that is eligible in one, might not be eligible in another or the credits may have different rates.
Considering an Application? Have Questions?
At Business Improvement Group we have a dedicated to that can help you apply for Digital Media Tax Credits. To learn more about the OIDMTC or tax credits in other provinces, get in touch here.
You can also learn more about us here.