Entertainment and Media Tax Clip: Nova Scotia's Film Industry Tax Credit and Digital Media Tax Credit enhanced (March 28, 2011)

Enhancements to Nova Scotia's:

  • Film Industry Tax Credit — eliminate the total production cap and relax the residency requirements that apply to employees; and
  • Digital Media Tax Credit — relax the residency requirements that apply to employees.

The changes apply to productions with principal photography starting after November 30, 2010. Draft legislation is forthcoming.

Nova Scotia announced the following tax measures to help the province's film and digital media sectors remain competitive.

Film Industry Tax Credit

The Nova Scotia Film Industry Tax Credit is a refundable credit available to taxable Canadian corporations that produce film and television productions in the province.

For productions with principal photography commencing after November 30, 2010, enhancements to the credit:

  • provide that employees must be resident in Nova Scotia only during the production period; and
  • eliminate the cap on total production costs, as follows:
  Productions with principal photography commencing
before December 1, 2010 after November 30, 2010
Principal photography is: in Metro Halifax Lesser of: 50% of eligible Nova Scotia labour (1)
25% of total production costs N/A
outside Metro Halifax
Lesser of:
60% of eligible Nova Scotia labour (1)
30% of total production costs N/A

(1) Plus 5% frequent filming bonus available for the third eligible film produced in Nova Scotia within twenty-four months.

Digital Media Tax Credit

The Nova Scotia Digital Media Tax Credit is a refundable credit available to taxable Canadian corporations that develop interactive digital media products in the province. An interactive digital media product must educate, inform or entertain, and present information in at least two of: text, sound or images.

For productions with principal photography starting after November 30, 2010, employees must be resident in Nova Scotia only during the production period. Details of the credit follow:

  Digital Media Tax Credit (1)
Principal photography is: in Metro Halifax Lesser of: 550% of eligible Nova Scotia labour
25% of total Nova Scotia expenditures
outside Metro Halifax Lesser of: 60% of eligible Nova Scotia labour
30% of total Nova Scotia expenditures

(1) Corporations may also receive a credit on marketing and distribution expenditures to a maximum of $100,000 per product. These expenditures may be made outside the province.

PwC Comments

These changes will be welcomed by film and digital media producers operating in Nova Scotia. They are intended to help the industry remain competitive and attract skilled employees.

For more film, video and digital media incentives, see PwC's: