FAQs
OFTTC: Frequently Asked Questions
1. What are the requirements for inter-provincial co-productions?
2. What are the requirements for the regional bonus?
3. What are the requirements for the first-time producer bonus?
4. What is the Production Commencement Time (PCT) and how is it determined?
5. Can I claim labour on fringes?
6. What are non-Ontario costs?
7. What is considered "assistance" for the OFTTC and therefore grinds the tax credit?
8. Do I need to submit the "Ontario Declaration of Residency/Consent Forms" to the OMDC?
9. Which CAVCO citizenship declarations should I submit?
10. Do I need to include the OMDC's logo in the production's credits?
11. Who should I contact in the Tax Credits Department with other questions?
1. What are the requirements for inter-provincial co-productions?
In the case of an inter-provincial co-production, the OFTTC requirements that 85% of the shooting/key animation take place in Ontario and that 95% of the cost of post-production be carried out in Ontario are waived. The production must still meet all the other OFTTC requirements.
There must be a co-production agreement in place between the Ontario qualifying corporation and a Canadian corporation from another province. At least 20% of the costs of the production must be borne by the Ontario producer.
The OFTTC is based on Ontario expenditures, so it is preferable to have separate corporations in each jurisdiction. Although a jointly-owned production company is eligible for the OFTTC, it may be more difficult to identify the Ontario co-producer’s costs with such a structure. It is therefore not recommended as a co-production structure since it can be problematic for audit purposes.
Other provinces may have further requirements, so please check with the relevant entities in those jurisdictions.
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2. What are the requirements for the regional bonus?
A production will qualify as a regional Ontario production if:
a) all of the Ontario Principal Photography takes place outside the Greater Toronto Area (City of Toronto, Durham, Halton, Peel and York);
or
b) where Principal Photography in Ontario is done partly inside the GTA and partly outside the GTA, if:
i) there are at least 5 Ontario location days* (or for a TV series, the number of
Ontario location days at least equals the number of episodes in the production);
and
ii) at least 85% of those Ontario location days are outside the GTA.
When an applicant is claiming the regional bonus, we will not issue a Certificate of Eligibility until Principal Photography has been completed. The OMDC analyst will take a very close look at the shoot day ratio, and will want to see all call sheets or DPRs. If the production does not have call sheets or DPRs, other items that might also help to prove where shooting took place include: location permits, invoices, etc.
* Ontario location day: is a day on which principal photography for the production is done in Ontario outside a film studio.
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3. What are the requirements for the first-time producer bonus?
A production qualifies for this bonus if:
• the producer does not have more than one previous producer screen credit for a production that was commercially released, or broadcast in prime time; and
• the producer has not participated as a producer on another production which received an OFTTC certificate; and
• the qualifying production company is not controlled directly or indirectly by: an individual with more than one previous producer screen credit for a production that was commercially released or broadcast in prime time; or by someone who has participated as a producer on a production that has received an OFTTC certificate; or by a corporation that has received an OFTTC certificate.
If you would like to apply for the bonus, you should contact us for a First-Time Producer Declaration, which will have to be submitted (along with a c.v.) for every producer on the production, including the executive producers and co-producers.
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4. What is the Production Commencement Time (PCT) and how is it determined?
Only eligible labour incurred on or after the Production Commencement Time (PCT) can be claimed for a production. The PCT is the earlier of a) or b):
a) is the commencement of principal photography;
b) is the latest of the following 3 dates:
i) first script labour expenditure *
ii) rights acquisition **
iii) 2 years prior to principal photography
* The date of first script labour expenditure is the date the applicant production company (or its parent corporation***) first incurs an expenditure for salary, wages or other remuneration for the activities of scriptwriters, that are directly attributable to the development by the company of script material for the production. Script material can include a draft script, original story, narration, outline, synopsis, or treatment, etc. It does not include research.
** The date of rights acquisition is the date the applicant production company (or its parent corporation***) first acquires the property on which the production is based.
*** For the purposes of PCT, ‘parent corporation’ is interpreted to mean a corporation that 100% owns another corporation. If there are two or more shareholders of a corporation, that corporation is considered not to have a parent.
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5. Can I claim labour on fringes?
The rule of thumb for fringes is that only those costs that are taxable benefits to the employee can be included as eligible labour expenditures. Items such as vacation pay, retirement contributions and insurance contributions can be taxable benefits if they are included in the gross wages of the employee (and listed on the T4).
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6. What are non-Ontario costs?
In order to receive the OFTTC, a production must have no more than 25% non-Ontario costs. Non-Ontario costs are costs not paid to either Ontario residents or corporations with a permanent establishment in Ontario.
These costs are not necessarily determined the same way as non-Canadian costs are for the federal credit. For instance, per diems that are spent outside of Ontario are non-Ontario costs unless those amounts were included in the crew agreements for Ontario residents as taxable income. Hotel expenses outside of Ontario are non-Ontario costs, even if the person who stayed in the room is an Ontario resident.
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7. What is considered ‘assistance’ for the OFTTC and therefore grinds the tax credit?
Assistance includes grants, subsidies and forgivable loans. These will reduce (‘grind’) your tax credit.
Bona fide loans with a set repayment date, other tax credits, licence fees and equity investments are not considered assistance.
Sponsorships may be considered assistance if there does not appear to be an exchange of benefits (such as cash or goods) at fair market value between the producer and the sponsor.
Labour deferrals reduce the amount of labour that can be claimed for the tax credit. Deferrals for non-labour costs do not.
We will want to see documentation of all the financial contributions to a production, including loans, deferrals and sponsorship amounts.
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8. Do I need to submit the “Ontario Declaration of Residency/Consent Forms” to the OMDC?
No, we generally do not want to see these declarations as part of our review. We require crew/cast lists that include the job title and residency address for each person for whom labour is being claimed.
However, the Canada Revenue Agency may ask to see the declarations as part of their audit.
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9. Which CAVCO citizenship declarations should I submit?
If you are not able to include the production’s CAVCO Part B Certificate along with your OFTTC application, then we need a copy of the CAVCO citizenship declarations of all the producer and producer-related personnel (including the production manager), as well as all the key creative personnel for whom Canadian content points are being claimed.
We keep a database of the citizenship information that is submitted to us, so if we already have the required info on file we will not ask for it again.
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10. Do I need to include the OMDC’s logo in the production’s credits?
A screen credit recognizing financial support from the Ontario Government is available for producers to acknowledge the OFTTC’s contribution to their production. Although it is not required (since tax credit information is considered confidential), a screen credit is certainly a welcome and appropriate way to acknowledge taxpayer support. The Ontario wordmark logo and accompanying guidelines can be downloaded from:
http://www.omdc.on.ca/Page3236.aspx
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11. Who should I contact in the Tax Credits Department with other questions?
If you have further questions, please e-mail taxcredits@omdc.on.ca or call us at 416- 314-6858 and ask to speak to the Business Officer who is on "phone duty" for the Tax Credits Department. There is a different person on phone duty every day, and he/she will be happy to assist you. This is the appropriate contact for all general queries on that day.
