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OIDMTC: Frequently Asked Questions

*The February 2017 version of the FAQs has been updated:
- to advise of the new tax credit administration fee structure, effective April 1, 2017; and
- to confirm there is no change to the treatment of talk shows.
Numbering may have changed.

As of February 2017

Please Note: 

This FAQ is a general guide and may not be relied upon to determine product, expenditure, or applicant corporation eligibility. Please consult the OIDMTC legislation and regulations for further details.

The 2015 Ontario Budget of April 23, 2015 proposed several changes to the OIDMTC. The Ministry of Finance published a bulletin on the OIDMTC on May 6, 2015 that further clarified these proposed changes. On November 2, 2015 the Ontario Government posted the proposed OIDMTC regulations on Ontario’s Regulations Registry. See link. The Ministry of Finance also released an updated bulletin on November 2, 2015 related to the proposed regulations. On November 14, 2016 the Ontario Government introduced further proposed changes to the OIDMTC in the Fall Economic Statement and the Building Ontario Up for Everyone Act (Budget Measures) 2016 – Bill 70, which passed into law on December 8, 2016.

Applicants 

A1. Are partnerships eligible to apply? 
A2. Does the corporation's type of business matter? 
A3. Is co-development eligible? 

Products 

P1. What are the four types of products that can be claimed?
P2. What is the difference between non-specified and specified products?
P3. What is the difference in categories between non-specified and specified products vs. digital games developed by a qualifying or specialized digital game corporation?
P4. What kinds of products are eligible for the OIDMTC?
P5. What kinds of products are ineligible under the proposed 2015 Budget and draft regulations?
P6. Under the changes announced in the 2015 Budget and draft regulations would a website based on a talk show be eligible for the OIDMTC?
P7. What if my company began work on my product prior to April 23, 2015?
P8. What types of website structures are ineligible for the OIDMTC?
P9. Are products like webisodes, or mobisodes eligible?
P10. Is an online catalogue type of site developed in Ontario eligible?
P11. Is an online social networking site type of product eligible?
P12. How do I determine the product completion date?
P13. Is content required in the product as of the completion date to be eligible?
P14. Can a new version of the same product be claimed?
P15. Do different versions of a product need to be submitted as separate products in an OIDMTC claim?
P16. Can a different language version of the same product be claimed?
P17. How do I demonstrate an online product was developed for sale or licensing?
P18. What is the best way to demonstrate a product’s Chain of Title? 

Expenditures 

E1. What is considered 'government assistance' for the OIDMTC and therefore grinds the tax credit?
E2. Can both Scientific Research & Experimental Development (SR&ED) and OIDMTC be claimed on the same labour expenditure?  
E3. Are marketing /sales salaries or wages eligible to be claimed for OIDMTC? 
E4. Do I need to disclose all expenditures incurred and all activities undertaken to complete a product, even if they are not included in my OIDMTC claim?
E5. What is the CRA’s look-through approach and how is it applied to remuneration claimed for OIDMTC?
E6. What is the CRA’s 65% administrative position? 
 
Documentation

D1. Do we need to submit all contractor agreements or T4s for employees? 

Filing 

F1. Does OMDC provide Preliminary Assessments regarding the eligibility of products? 
F2. How many applications to the OMDC should be submitted and when do I apply to the OMDC?
F3. What is the deadline to apply? If we have completed products in a previous taxation year, can we still apply for the OIDMTC? 
F4. How do we claim Marketing and Distribution costs incurred after the tax year end in which a product is completed?
F5. Should I withhold filing the Corporate Tax Return until I have received the OIDMTC Certificate?  
F6. Do I need to submit the "Ontario Declaration of Residency/Consent Forms" to the OMDC?
F7. Does the CRA allow the assignment of tax refunds to another corporation? 
F8. What is the new tax credit administration fee structure?
F9. I submitted my application before April 1, 2017, so will I be subject to the new tax credit administration fee structure?

Other Questions 

Q1. Who should I contact in the Tax Credits Department with other questions or more detail? 
Q2. What is CRA’s role in the OIDMTC review process? 
 
Applicants 

A1. Are partnerships eligible to apply? 

No. Only a qualifying corporation may apply - that is, it must be a corporation incorporated in Canada (though it may be Canadian or foreign controlled) and it must have a permanent establishment in Ontario. There are other restrictions; please see the OIDMTC Information/Application Package.

A2. Does the corporation's type of business matter? 

Generally, when applying for specified and non-specified products under section 93 of the Taxation Act, 2007, to be considered a qualifying corporation, the type of business activities is not restricted to interactive digital media product development. 

However, if your company is applying as a digital game corporation under section 93.1 or 93.2 then the nature of  your company’s business does matter.  Under section 93.1 a qualifying digital game corporation carries on a business that includes the development of digital games in Ontario.  Under section 93.2 a specialized digital game corporation carries on a business that includes the development of digital games in Ontario where the corporation has incurred a minimum of $1 million in eligible labour expenditures in the year on one or more digital games and either a) at least 80% of the total salaries and wages incurred by the corporation in the year for services rendered in Ontario are directly attributable to the development of digital games, or b) at least 90% of the corporation’s gross revenues for the year are directly attributable to the development of digital games.

A3. Is co-development eligible? 
 
As announced in the 2015 Ontario Budget and draft regulations, in order for a product to be eligible for the OIDMTC the product must meet a rule based on the total development labour to create the product incurred during the 37-month claim period. If you are applying for the OIDMTC your company must demonstrate that 80% of the total development labour to create the product is attributable to eligible wages of your employees, and eligible remuneration paid by you to arm’s length individuals or their personal corporations or sole proprietorships. Also, 25% of the total development labour to create the product must be attributable to eligible wages paid to your employees. Please note: eligible wages and eligible remuneration for the 80/25 rule must be paid for work performed in Ontario by Ontario residents.

It is possible for some co-development to take place on a product. The 80/25 rule allows for up to 20% of the total development labour costs to be incurred and paid by another corporation. In such a co-development scenario there will still only be one applicant who will be able to demonstrate that they’ve met the 80/25 rule for OIDMTC eligibility.

The only exceptions to the 80/25 rule are for qualifying digital game corporations under section 93.1 or specialized digital game corporations under section 93.2:

Under section 93.1 applicants do not have to meet the 80/25 rule. Instead, to be eligible under section 93.1 you must be a qualifying digital game corporation meaning that you carried on a business that includes the development of digital games in Ontario AND incurred a minimum of $1 million in eligible labour expenditures on a digital game under an agreement with a purchaser corporation during a 36-month period that ends in the tax year.

Under section 93.2 applicants do not have to meet the 80/25 rule. Instead, to be eligible under section 93.2 you must be a specialized digital game corporation meaning that you carried on a business that includes the development of digital games in Ontario, where your company incurred a minimum of $1 million in eligible labour expenditures in the year on a digital game(s) and either a) at least 80% of the total salaries and wages incurred by your company in the year for services rendered in Ontario are directly attributable to the development of digital games, or b) at least 90% of your company’s gross revenues for the year are directly attributable to the development of digital games.

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Products

 
P1. What are the four types of products that can be claimed? 

There are four types of products that can be claimed for the OIDMTC: non-specified products, specified products (meaning products developed under a fee-for-service arrangement), digital games developed by qualifying digital game corporations and digital games developed by specialized digital game corporations.

P2. What is the difference between non-specified and specified products? 

Non-specified products are developed by your company for sale or licence to one or more arm’s length parties who have not previously entered into an arrangement with your company for development of the product. 

Specified products are developed by your company under the terms of an agreement between your company and an arm’s length purchaser corporation for sale or licence by that purchaser to one or more arm’s length parties.  Specified products are essentially developed under a fee-for-service arrangement. 

Non-specified products receive a higher OIDMTC rate of 40% on eligible expenditures,, while specified products receive an OIDMTC rate of 35% on eligible expenditures incurred..  (For relevant OIDMTC rates and eligible expenditures  incurred prior to March 27, 2009 please contact the OMDC).

PLEASE NOTE: whether it’s a non-specified or specified product, your company must demonstrate that they meet the 80/25 rule for the product.

P3. What is the difference in categories between non-specified and specified products vs digital games developed by a qualifying or specialized digital game corporation? 

A qualifying digital game corporation carries on a business that includes the development of digital games AND incurs $1 million in eligible labour expenditures in a 36 month period on a digital game under an agreement with a purchaser corporation.  Unlike non-specified and specified products, a digital game developed by a qualifying digital game corporation can qualify for the OIDMTC even if a) the corporation did not meet the 80/25 rule for the digital game, b) the digital  game is not completed, and c) the corporation is related to the purchaser corporation for whom the digital game  is being developed.  Qualifying digital game corporations receive a 35% OIDMTC on eligible expenditures incurred after March 26, 2009. 

A specialized digital game corporation carries on a business that includes the development of digital games, where the company has incurred $1 million in eligible labour expenditures in the year on a digital game(s) and either a) at least 80% of the total salaries and wages incurred by the corporation in the year for services rendered in Ontario are directly attributable to the development of digital games, or b) at least 90% of the corporation’s gross revenues for the year are directly attributable to the development of digital games. Unlike non-specified and specified products, a digital game developed by a specialized digital game corporation can qualify for the OIDMTC even if a) the corporation did not meet the 80/25 rule  for the digital game, b) the  digital game is not completed, and c) the corporation is related to the purchaser corporation.  Specialized digital game corporations can file annually and receive a 35% OIDMTC on eligible expenditures incurred after March 26, 2009.

P4. What kinds of products are eligible for the OIDMTC? 

Products that may be eligible for the OIDMTC include, but are not restricted to, digital games, mobile applications, and e-learning products for children. The 2015 Ontario Budget and draft regulations introduced several proposed changes to better target and focus the OIDMTC by excluding eligibility for certain products. 

P5. What kinds of products are ineligible under the proposed 2015 Budget and draft regulations? 

The Ontario 2015 Budget and draft regulations proposed narrowing the primary purpose requirement for eligible specified and non-specified products. Previously a product’s primary purpose could be to inform, educate or entertain users. Under the proposed changes, a product’s primary purpose must be to entertain users or educate children under the age of 12.

The 2015 Budget and draft regulations also proposed excluding certain types of products including:
- products providing any content that is news, current events or public affairs programming; opinion, commentary or advice; or weather or market reports;
- products produced primarily for industrial, corporate or institutional purposes including vocational training products or products that educate or inform employees;
- products that are primarily a reference material or otherwise designed to be used as a resource for finding information, such as a guide for equipment or software, a dictionary or a map;
- products that aggregate content from various internet sources;
- products that are a search engine;
- products that are a blog; and
- products that are primarily a database, including a real estate or recipe database.

The 2015 Budget and draft regulations proposed excluding most websites. Websites would only be eligible if more than 50% of the site hosts any of the following:
- one or more digital games;
- content related to a film, television or internet production ; 
- one or more virtual or augmented reality experiences; and/or
- content that is designed to educate users who are under 12 years of age; or
- any combination of the above.

The 2015 Budget and draft regulations also proposed replacing the former 90% developed-by rule (which required the applicant company to have developed all or substantially all of the product themselves) with a new 80/25 rule. The 80% test requires that 80% of total development labour costs to create the product be for work performed in Ontario and paid as eligible salaries or wages to applicant’s employees and eligible remuneration to personal corporations and individuals providing services as part of sole proprietorships with no employees. This 80% test applies to all products certified as eligible on or after April 24, 2015. The 25% test requires that 25% of the total development labour costs must be paid as eligible salaries or wages to employees of your company for work performed in Ontario. This 25% test applies to all products that apply for certification on or after April 24, 2015.

Finally, the 2015 Budget and draft regulations proposed that products must now have a revenue generating stream.

Products that only have development labour costs incurred after April 23, 2015 must meet all of the new eligibility requirements proposed in the 2015 Budget and draft regulations.

P6. Under the changes announced in the 2015 Budget and draft regulations would a website based on a talk show be eligible for the OIDMTC?

Talk shows have always been ineligible for OCASE, OFTTC and OPSTC and this continues to be the case despite recent Federal changes to the Canadian Film or Video Production Tax Credit. Websites based on talk shows were also intended to be excluded for purposes of the OIDMTC as per the draft regulations posted on November 2, 2015. The Ministry of Finance issued a bulletin on January 11, 2017, which confirms this treatment of talk shows. See link.

P7. What if my company began work on my product prior to April 23, 2015? 

Should your product not be eligible under the new requirements proposed in the 2015 Budget and draft regulations but your product has development labour costs incurred prior to April 24, 2015, your product may be reviewed under the pre-Budget rules. In that case, you will be limited to claim eligible expenditures incurred on or before April 23, 2015 to calculate your OIDMTC. (However, please note that the 80% test will apply to all products regardless of the date the activities and costs were incurred. The 25% test will also apply for products for which the application for certification was received by the OMDC on or after April 24, 2015.)

P8. What types of website structures are ineligible for the OIDMTC? 

In order for product development work to be eligible for the OIDMTC, an applicant must develop a completed interactive digital media product. A component of an interactive digital media product is not eligible for the OIDMTC because it is not a completed product. 

“Wrapped, “embedded”, “nested, or “framed” website content is not eligible for the OIDMTC. Website components licensed by television broadcasters are often contracted to be integrated (“wrapped, “nested”, “framed” or “embedded”) into the larger broadcaster website. Work of this nature is ineligible because it exists as a component of a third party’s larger website rather than as a completed interactive digital media product developed by the applicant. OMDC does not certify components of a product. In order to be a completed product, a website must be a stand-alone product. 

Mini-sites and microsites are not eligible for the OIDMTC as they are not complete products. Mini-sites and microsites are a separate page of a website that has a different URL than its home page and is used to provide information about, or to promote, something that is related to the home page. For example, a large software corporation may create a microsite with its own URL to feature a tech blog. When the user goes to that URL address it takes them to a tech blog page that is integrated into the software corporation’s main website. The microsite is one of many pages that make up the corporation’s website. 

If a web product can demonstrate it functions independently and is not integrated into another website, can be licensed to arm’s length users, has its own URL, and operates using its own content management system (“CMS”) platform or software, then that web product may be considered a completed interactive digital media product for the purposes of the OIDMTC. From the standpoint of a product review, OMDC looks at the technical structure and development, the business model, how users (i.e. members of the public) access the product, and user experience of a product to help determine if something is a complete interactive digital media product or a component of another product.

P9. Are products like webisodes, or mobisodes eligible? 

Webisodes or mobisodes are not eligible interactive digital media products for the OIDMTC. Webisodes or mobisodes are considered content that could be featured on, or part of an interactive digital media product such as a website or mobile app, but they are not complete interactive digital media products in their own right. 

P10. Is an online catalogue type of site developed in Ontario eligible? 

No. As announced in the 2015 Budget and draft regulations, eligible products must meet the primary purpose test to entertain users or educate children under 12. Also, most website products will be excluded with the exception of those that primarily host: digital games; content related to film, television or internet productions; virtual or augmented reality experiences; and/or educational products directed at children under the age of 12.  Therefore, online catalogue types of websites will not be eligible for the OIDMTC for expenditures incurred after April 23, 2015.

Pre-Budget 2015 rules stated that to be eligible, a product’s primary purpose must be to inform, educate, or entertain. Therefore interactive digital media products that primarily present, promote or sell products or services are not considered eligible even prior to Budget 2015. The OMDC will interpret “primarily” to mean “more than 50%”. 

Note that informing by presenting products and/or services for sale is considered promotional. 

P11. Is an online social networking site type of product eligible? 

No. The 2015 Budget and draft regulations proposed changes to exclude certain types of products, including most websites. Websites would only be eligible if the site primarily hosted: digital games; content related to film, television or internet productions; virtual or augmented reality experiences; and/or educational products directed at children under the age of 12. As well, the 2015 Budget and draft regulations proposed restricting eligibility to those products whose primary purpose was to entertain users or educate children under 12. Therefore, online social networking websites will not be eligible for the OIDMTC for expenditures incurred after April 23, 2015.

For such products with expenditures incurred prior to April 24, 2015, it should be noted that often social networking websites are made up of user generated content. If the website was primarily (more than 50%) used for interpersonal communication it would not be eligible. For example, a product like Facebook would not be eligible for the OIDMTC. Some products that apply for the OIDMTC and have a social networking component  may still be eligible if those products also feature a significant amount of other content created by the applicant corporation that meets the primary purpose. OMDC reviews all the content presented, including any user generated content to determine the primary purpose of the product. 

P12. How do I determine the product completion date? 

The product completion date is the date when the product is shelf-ready, accessible, online, and/or available for exploitation. This date must be consistent with the product development documentation. 

OMDC reviews the product as of this date to determine eligibility. Note that maintenance expenditures or bug fixes are not eligible for OIDMTC as they are not considered part of product development. 

P13. Is content required in the product as of the completion date to be eligible? 

As of the product completion date, the product must contain content that presents information in at least two of text, sound, and images, and the content must meet the primary purpose test. 

P14. Can a new version of the same product be claimed? 

OIDMTC is a content based credit, so a version of the product with different content can also be eligible, as long as the new version is significantly different. The difference can be the content, the underlying technology, or a combination of the two. 

New versions of website products are restricted to being claimed only every two years. 

P15. Do different versions of a product need to be submitted as separate products in an OIDMTC claim?

Yes. Each version of a product that is developed for a specific platform should be submitted as a separate product in an OIDMTC application, i.e. Product A (Android), Product A (iOS), Product A (Blackberry). Each version of a product should have separate cost allocations and may also have different start and completion dates. 

P16. Can a different language version of the same product be claimed? 

No. If the only change between product versions is the language of the text, video, and/or audio, this is not considered a significant enough difference for OMDC to consider them to be separate or new versions of products. 

P17. How do I demonstrate an online product was developed for sale or licensing? 

There are different ways to demonstrate a product was developed for sale or licensing, such as a distribution or financing agreement, customer invoice, or by determination that the product is available to the public, i.e. available online.

OMDC considers a website product to be available for public license or use.

Please note that the 2015 Budget and draft regulations proposed that products must  have a revenue generating stream. Proof of sales, in-product purchases, licence for use, third party advertising within the product, subscription-based access, or fee-for-use of the product would demonstrate a revenue generating stream.

P18. What is the best way to demonstrate a product’s Chain of Title?

Trademark or copyright registration approval,
Product development, licensing, or sales agreement, fully signed and dated,
Employee or contractor agreement, fully signed and dated,
Product Terms of Use documentation, or 
Domain name registration for a website product.

Please note that a letter from an Officer of the applicant corporation stating ownership is not sufficient chain of title evidence for OMDC.

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Expenditures 

E1. What is considered 'government assistance' for the OIDMTC and therefore grinds the tax credit? 

Government assistance includes government grants, subsidies forgivable loans, deductions from tax other than OIDMTC and investment allowances.  These will reduce (‘grind’) the OIDMTC.

The following are not considered government assistance: 

• Other tax credits such as Scientific Research & Experimental Development (SR&ED), 
• Bona fide loans with a set repayment date, (See Canada Revenue Agency’s (CRA) Application Policy on Bona Fide Loan – FAS 2008-01 for more information), and 
• Equity investments.

Note that labour deferrals (amounts not paid within 60 days of the tax year end) cannot be claimed for the OIDMTC for that tax year. However if it is paid within 60 days after the end of the subsequent tax year, the labour expenditures can be claimed in the subsequent tax year as part of qualifying expenditures. 

The OMDC requires documentation of all financial contributions to the development of a product, including loans, deferrals, and sponsorship amounts.

E2. Can both Scientific Research & Experimental Development (SR&ED) and OIDMTC be claimed on the same labour expenditure?  

No. Your company cannot include costs claimed for SR&ED activities, whether allowed by CRA or not, in the OIDMTC claim. Labour included in the OIDMTC claim must be for different activities than those claimed under SR&ED. 

E3. Are marketing / sales salaries or wages eligible to be claimed for OIDMTC? 
 
Up to $100,000 in eligible marketing and distribution expenditures (which can include salaries and wages specific to marketing and distribution of a non-specified product), can be claimed once for a non-specified product.  Marketing and distribution expenditures cannot be claimed for specified products, nor included in claims made by digital game corporations under sections 93.1 or 93.2.

E4. Do I need to disclose all expenditures incurred and all activities undertaken to complete a product, even if they are not included in my OIDMTC claim?

Yes. Applicants must disclose all development labour expenditures incurred to create the product, even if the labour expenditures for that work was not included in the OIDMTC claim. The only exception to this requirement would be for those making an OIDMTC claim under section 93.1 as a Qualifying Digital Game Corporation or under section 93.2 as a Specialized Digital Game Corporation. 

Applicants must use the OIDMTC Expenditure template available on the OMDC website entitled Specified and Non-Specified Expenditures Breakdown and complete the section “Declaration of Other Development Labour Expenditures (Unclaimed/Ineligible)” as well as the section “Development Labour Claimed under SR&ED”.

E5. What is CRA’s look-through approach and how is it  applied to remuneration claimed for OIDMTC?

The CRA’s look-through approach limits the amount of remuneration that may qualify as a labour expenditure to the amount that would have been incurred by the qualified corporation had it directly employed the individuals.  This approach is used when remuneration is paid to a self-employed individual, a taxable Canadian Ontario based corporation, or a partnership carrying on a business in Ontario for the services of its employee(s). In applying this approach, the qualifying corporation must get from the service provider the amount of salary or wages paid to the employee. This amount should qualify as a qualifying remuneration amount for the development of eligible products claimed under the OIDMTC.

To read more about the CRA’s look-through approach, please see CRA Publication RC4164 (page 15), www.cra.gc.ca/E/pub/tg/rc4164.

E6. What is the CRA’s 65% administrative position?

When the qualifying corporation engages a third party service provider with whom it deals at arm’s length (that is, with whom it is not related), the amount of salary or wages paid to the employee may not be available. Under such circumstances, the CRA will accept, as an administrative practice, 65% of the labour portion of an invoice amount as a reasonable estimate of the salary or wages paid to the employees that is directly attributable to the development of the product. The remaining 35% represents overhead and the service provider’s profit.  

To read more about the CRA’s 65% administrative position, please see CRA Publication RC4164 (page 15), www.cra.gc.ca/E/pub/tg/rc4164.

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Documentation

D1. Do we need to submit all contractor agreements or T4s for employees?

For specified and non-specified products we will often request to see payroll reports, T4s, invoices and contractor agreements to help determine if the labour included in the claim is directly attributable to the development of the product and to verify that the applicant corporation has met the 80/25 rule for the product. To expedite review of the 80/25 rule applicants should submit copies of T4s for the top five highest paid individuals claimed under wages and salaries to develop each product, as well as contractor agreements for the top five highest paid individuals, personal corporations or sole proprietorships claimed under remuneration for the development of each product. If no agreement exists, copies of invoices can be provided. Use the OIDMTC Expenditure template available on the OMDC website entitled Specified and Non-Specified Expenditures Breakdown and include job descriptions where indicated. 
Contractor agreements that relate to marketing and distribution expenditures are generally not necessary, however, in certain circumstances they may be requested by a Business Officer.

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Filing 

F1. Does OMDC provide Preliminary Assessments regarding the eligibility of products?

Due to the large volume of applications, the OMDC does not provide OIDMTC Preliminary Assessments. You can contact us by email at taxcredits@omdc.on.ca and indicate that you wish to speak to a Business Officer about OIDMTC eligibility for a particular product in advance of making an application. It is best if you set out a few details about your fact scenario in the email and include your name, company and telephone number. There is a different Business Officer on phone duty every day and he/she will respond to your email within one business day. 

F2. How many applications should be submitted to OMDC and when do I apply to OMDC? 
 
Only 1 application per tax year can be filed, which must contain all products completed in that tax year. For example, for a July 31, 2015tax year end, an interactive digital media product completed on February 1, 2015  would be submitted in a 2015 tax year OIDMTC application, while a product completed on July 1, 2016 would be submitted in a 2016 tax year OIDMTC application.

Under section 93.1 qualifying digital game corporations can apply to the OMDC in the tax year that falls after the end of the 36 month period in which the applicant has incurred the minimum $1 million in eligible labour expenditures in respect of an eligible digital game.

Under section 93.2 specialized digital game corporations can apply to the OMDC at the end of the tax year in which the applicant has incurred - the minimum $1 million in eligible labour expenditures in respect of an eligible digital game or games. 

F3. What is the deadline to apply? If we have completed products in a previous taxation year, can we still apply for the OIDMTC? 

There is an application deadline that requires your company to apply to OMDC for an OIDMTC Certificate of Eligibility for specified and/or non-specified products by the day that is 18 months after the end of your company’s taxation year in which development of the eligible product(s) was completed. This 18 month application deadline is in effect the day that is six months after November 14, 2016. [Note: that OMDC will accept OIDMTC applications older than 18 months as long as the application is submitted through our online application portal on or before May 15, 2017.]

Prior to this application deadline taking effect, applications can be made for prior tax years, however the applicant may have to make a request to the Canada Revenue Agency (CRA) to amend a previously filed tax return. It is the applicants’ responsibility to ensure that they are within the time limits for requesting an amendment to the tax return for a previous tax year and are not statute-barred. 

Please note that effective January 1, 2017, in addition to the administration fees calculated against your eligible expenditures, there will be a additional filing fee of $100:

- For applications made for specified and non-specified products under section 93 the additional filing fee is in effect for applications received more than 18 months from the year-end in which the product was completed.
- For non-specified products that are only making a marketing and distribution claim for an eligible product that was previously certified, the additional filing fee is in effect for applications received more than 18 months from the subsequent year-end following the year in which the eligible product was completed.
- For applications made by specialized digital game corporations under section 93.2 the additional filing fee is in effect for applications received more than 18 months from the year-end in which the applicant is claiming as a specialized digital game corporation.
- For applications made by qualifying digital game corporations under section 93.1 the additional filing fee is in effect for applications received more than 18 months from the year-end of that claim.

Please note: effective January 1, 2017, there is a fee of $100 for amended Certificates that are requested.

F4. How do we claim Marketing and Distribution costs incurred after the tax year end in which a product is completed?

For non-specified products, your company can claim up to $100,000 in eligible marketing and distribution (M&D) costs per product. M&D costs can be claimed for the period 24 months prior to the completion date and 12 months after the completion date.  If there are some eligible M&D costs that fall in a subsequent taxation year that relate to a non-specified product, your company should include those M&D costs in a separate OIDMTC claim for that subsequent taxation year. 

For example, a non-specified product is claimed in your 2015 taxation year and there are eligible M&D costs that are directly related to this product that fall in your 2016 taxation year.  Youshould prepare a separate 2016 OIDMTC application and include those M&D costs in a 2016 claim along with any other completed products eligible for the OIDMTC. Please note that when using the Online Application Portal there is an option to choose “Non-Specified (93) M&D Only” as a product type in these cases where you are claiming M&D costs only,  for a non-specified product claimed in a previous OIDMTC application.

F5. Should I withhold filing the Corporate Tax Return until I have received the OIDMTC Certificate? 

No. File your tax return with the estimated OIDMTC amount as follows: 

For tax years that end on or after January 1, 2009, file the T2 Corporation Income Tax Return along with schedule T2SCH560 “Ontario Interactive Digital Media Tax Credit (2009 and later tax years)” with the Canada Revenue Agency (CRA) along with the estimated OIDMTC amount. Once the Certificate of Eligibility is received from the OMDC, submit the Certificate of Eligibility (or copy) to the CRA. CRA will process the claim once they have received the OIDMTC Certificate of Eligibility as well as the T2 Corporation Income Tax Return and applicable schedules. You will receive your assessments and reassessments from the CRA. 

F6. Do I need to submit the "Ontario Declaration of Residency/Consent Forms" to the OMDC? 

No, for OIDMTC the OMDC generally does not need to see the Ontario Declaration of Residency/Consent Forms as part of the review. We do require the list of names of all individuals working on the product, and the list of names and addresses of individuals and companies for which remuneration  is being claimed.

F7. Does the CRA allow the assignment of tax refunds to another corporation?

Under subsection 220(6) of the Income Tax Act a corporation may assign any amount payable under this Act. However, according to Subsection 220(7) the minister of National Revenue “is not required to pay to the assignee, the assigned amount.” As an alternative, the CRA will allow a qualifying corporation to redirect its tax refund, net of any taxes owing, to the mailing address of its choice, for example, a financial institution.  However, a refund issued in this manner will still be issued in the name of the corporation. 

F8. What is the new tax credit administration fee structure?

Effective April 1, 2017 there is a new administration fee structure for tax credits which will offset the costs of administering the program. The OIDMTC administration fee will be calculated as 0.15% of eligible expenditures for the application. There is a minimum fee of $1,000 per application and a maximum fee of $10,000 per application.

As previously announced, effective January 1, 2017 there is an additional filing fee of $100 applied to applications claiming under Section 93 (specified and non-specified products) for Certificates of Eligibility received more than 18 months from the year-end in which the product was completed.

For non-specified products that are only making a marketing and distribution claim for an eligible product that was previously certified, the additional fee is in effect for applications received more than 18 months from subsequent year-end following the year in which the eligible product was completed.

For claims made by Specialized Digital Game Corporations under 93.2 the additional fee is in effect for applications received more than 18 months from the year-end in which the applicant is claiming as a Specialized Digital Game Corporation. 

For claims made by Qualifying Digital Game Corporations under 93.1 the additional fee is in effect for applications received more than 18 months from the year-end of that claim.

As well, effective January 1, 2017 there is a fee of $100 for each Amended Certificate requested.

F9. I submitted my application before April 1, 2017, so will I be subject to the new tax credit administration fee structure?

The new tax fee structure will be applied to tax credit applications received on or after April 1, 2017.

The additional filing fee and fee for Amended Certificates are separate from the new fee structure. These fees will be applied to older tax credit applications received on or after January 1, 2017 and requests for Amended Certificates received on or after January 1, 2017

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Other Questions 

Q1. Who should I contact in the Tax Credits Department with other questions or more detail? 

If you have further questions, please contact the phone duty line by e-mail taxcredits@omdc.on.ca, or call us at 416-642-6659. Please leave a detailed message including your name, company, phone number and the tax credit or file about which you are inquiring. There is a different person on phone duty every day, and he/she will respond to your email or call within one business day. 

Q2. What is CRA’s role in the OIDMTC review process?

Please see the Administrative Process section of the OIDMTC Guidelines. Also see the following link which describes CRA’s role in the OIDMTC review process: http://www.fin.gov.on.ca/en/credit/mtc/faq.html