Entertainment and Media Tax Clip: Quebec enhances Production Services Tax Credit (July 23, 2009)

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The Quebec Production Services Tax Credit (QPSTC) is a 25% refundable tax credit available to domestic- and foreign-based production companies that produce film and television productions in Quebec.

Productions that qualify for the QPSTC are also eligible for the Computer Animation and Special Effects Tax Credit (CASETC) if the company also performs eligible computer animation and special effects activities, or shoots in front of a chromatic screen. Quebec has enhanced these credits as follows:

 
If the main photography or recording work in Quebec is completed
 
before June 13, 2009
after June 12, 2009
 
Production Services Tax Credit
Computer Animation and Special Effects Tax Credit (CASETC)
Total
Production Services Tax Credit
Computer Animation and Special Effects Tax Credit (CASETC)
Total
General budget production (1)
25% of qualified Quebec labour
20% of qualified Quebec labour
45% of qualified Quebec labour
25% of qualified Quebec production costs (2)
5% of qualified Quebec production costs (2)
30% of qualified Quebec production costs (2)
Low-budget production
n/a
20% of qualified Quebec labour
n/a
20% of qualified Quebec labour
20% of qualified Quebec labour
  1. The production budget for a general budget production must exceed:
    • for a series of two or more episodes, or a series pilot for which the running time is:
      • 30 minutes or less, $100,000 per episode; or
      • over 30 minutes, $200,000 per episode; and
    • for other productions, $1,000,000.
  2. Qualified Quebec production costs are "all-spend" production costs incurred in Quebec, including qualified labour costs and the cost of qualified properties that are attributable to the qualified production, e.g., to acquire or rent tangible properties (including software).

However, the qualified production categories for these credits have been restricted to fiction and documentary films spanning at least 30 minutes, and television series where each episode is at least 30 minutes (exceptions to the minimum time limit apply for documentaries intended for children under 13). Previously, educational games, quiz shows and contests for children under 13 years, variety shows and television magazines were also eligible.

Draft legislation implementing these changes is forthcoming.

PricewaterhouseCoopers Comments
Film and video producers will welcome these changes as they intend to help Quebec continue to attract film and television productions.