QUEBEC’S DIGITAL INDUSTRY: OVERVIEW AND TAX INCENTIVES
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QUEBEC’S DIGITAL INDUSTRY: OVERVIEW AND TAX INCENTIVES Marie Claude Bernard, Director Montreal International Game Summit Alliance Jeu @mcbernard
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QUEBEC’S DIGITAL INDUSTRY: OVERVIEW AND TAX INCENTIVES. Marie Claude Bernard, Director Montreal International Game Summit Alliance Jeu @mcbernard. Videogames and animation in Quebec A global overview. Quebec, Cradle of Digital Animation. - PowerPoint PPT Presentation
Transcript of QUEBEC’S DIGITAL INDUSTRY: OVERVIEW AND TAX INCENTIVES
QUEBEC’S DIGITAL INDUSTRY:OVERVIEW AND TAX INCENTIVES
Marie Claude Bernard, DirectorMontreal International Game SummitAlliance Jeu @mcbernard
VIDEOGAMES AND ANIMATION IN QUEBECA GLOBAL OVERVIEW
Quebec, Cradle of Digital Animation
• End of 1940s: The National Film Board of Canada • 1970: Robert Forget and “Centre Animatique” • 1986: Daniel Langlois and Softimage• 1994: Acquisition of Softimage by Microsoft• 2001 Avid buys Softimage
Since then
A 600% growth since 2003
And today…
/ 7,000 jobs/ 3rd cluster in the world per capita/ Over 100 companies/ International leaders/ 3 new international companies
opened up shop in Montreal in 2010
VFX IN QUEBECA GLOBAL OVERVIEW
The cluster
/ Client type: local and foreign film and television producers / Companies: over 40 visual effects and animation studios / Workforce: 2 000 direct industry related positions
QUEBEC: A SUCCESS STORYOK, BUT WHY?
• An ideal location• An education system focused on the
industry’s needs• A very attractive location for employees• A highly creative workforce
A cost effective location
26,8% lower than Europe25,5% lower than the USA
FUNDING A TRANSMEDIA PROJECT IN QUEBEC – TAX INCENTIVES
Multimedia Title Production Tax Credit (Quebec)
• To foster development of the video game industry and certain distribution platforms
• Video game production activities• Credit of up to 37.5% on total salaries and
contractors• Refundable
Scientific Research & Experimental Development (Canada)• Federal (Canada) R&D tax credit rate
ranges from 20% to 35%• Refundable or not • Salaries, contractors, materials, capital
equipment• Proxy amount (65% of salaries incurred)
Scientific Research & Experimental Development (Quebec)• Québec tax credit rate ranges from 17.5%
to 37.5%• Refundable• Salaries and contractors
Comparative TableSR&ED Canadian-
ControlledPrivate Corp (CCPC)
Large Corporation
PROVINCIAL – always refundable
Salaries 37.50% 17.50%
Contractors 18.75% 8.75%
R&D contract with universities 28.00% 28.00%
FEDERAL – refundable for CCPCs
Salaries 43.63% 19.50%
Contractors 28.44% 18.25%
SR&ED contract with universities 25.20% 14.40%
Indirect materials and equipment 35.00% 20.00%
TOTAL
Salaries 82.13% 47.00%
Subcontractors 47.19% 27.00%
SR&ED contract with universities 53.20% 42.40%
Indirect materials and equipment 35.00% 20.00%
Comparative Table
Potential Credits per 100$ R&D Investment – Quebec
CCPC Non-Resident Held
Salaries Up to 82$ Up to 47$
Subcontractors Up to 47$ Up to 27$
Material consumed/Equipment rental Up to 24$ Up to 20$
Capital assets Up to 35$ Up to 20$
University Research Contractors Up to 53$ Up to 42$
University and Pre-Competitive Research Tax Credits (Quebec
University• 28% of total R&D expenses (same expense
base as for federal purposes)Pre-competitive research• 35% of total R&D expenses (same expense
base as for federal purposes)• To promote R&D partnerships amongst
corporations
E-business Tax Credit (Quebec)
• Eligible information technology activities• 30% credit rate• Refundable• Maximum of CDN$66,667 per employee
(credit of CDN$20,000)• Can be cumulated with R&D credit
(different activities)
Foreign Researcher Tax Holiday (Québec)
Foreign Researcher Tax Holiday (Québec)
• 5-year personal Québec tax holiday (up to 24%)
Canada Media Fund
• To champion the creation of successful, innovative Canadian content and software applications through financial support and industry research
• 2 streams : convergent and experimental• 330M$: 27M$ for the experimental stream
Quebec Tax Credit for Film Production Services
• 25% of eligible all-spend production costs including qualified labour costs and costs of qualified properties
• Improvement for computer-aided special effects and animation and shooting of scenes in front of a chroma-key : extra 20% of qualified labour costs
Refundable Tax Credit for Film Dubbing
• 30% of qualified expenditures
Canadian Video of Film Production Tax Credit
• 25% of qualified labour expenditures
Film of Video Production Services Tax Credit
• 16% of qualified Canadian labour expenditures
• To encourage the employment of Canadians
