Retroactive to March 27, 2009, Ontario Bill 218, which received royal assent on December 15, 2009, allows certified game developers who incur at least $1 million of Ontario labour expenditures annually in the development of eligible interactive digital media games, to claim a 35% Ontario Interactive Digital Media Tax Credit (OIDMTC) on Ontario salaries and wages. Certified game developers typically attribute at least 80% of their Ontario payroll or 90% of annual revenues to interactive digital media game development.
Announced in Ontario's 2009 Economic Outlook and Fiscal Review, the measure is an addition to a 2009 Ontario budget proposal (also implemented by Bill 218) that extends the OIDMTC to digital media game developers who incur a minimum of $1 million of eligible labour expenditures over a 36-month period for fee-for-service work done in Ontario in respect of an eligible product.
The OIDMTC is a refundable tax credit that is based on eligible Ontario labour expenditures and eligible marketing and distribution expenses claimed by a qualifying corporation with respect to an interactive digital media product:
The OIDMTC rates in Bill 218, effective for qualifying expenditures incurred after March 26, 2009, are:
This measure demonstrates Ontario's commitment to the importance of the growing digital media sector. The 35% credit will reduce the after-tax cost of developing interactive digital media games in Ontario for large game developers, making the province an even more attractive place to carry on these activities.