OSRTC 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. Numbering may have changed.
As of February 2017
1. The April 2015 Ontario Budget announced that the OSRTC would be eliminated. Can I still apply for the OSRTC?
If your eligible sound recording commenced before April 23, 2015, your company can still apply for the OSRTC. Please note that the OSRTC will only be calculated on expenditures incurred prior to May 1, 2016.
Please note: Effective January 1, 2017 there is an additional filing fee of $100 applied to applications for the first Certificate of Eligibility for the recording received more than 24 months after the first year-end of the claim. Please note: Effective January 1, 2017, there is a fee of $100 for Amended Certificates that are requested.
2. What does it mean when the tax credit requires the applicant company to have produced the recording?
The company that has paid for and borne the financial risks for the various activities involved in creating the sound recording, such as costs for recording, mixing, mastering, editing, engineering, session musicians, etc, is the company that is considered to have produced the recording. If your company only paid an advance on royalties or a distribution advance to an artist or another company which has incurred some recording costs, OMDC will look at whether those payments were meant to reimburse the recording costs.
3. If a track was composed by more than one person and one of them was not Canadian, can it still be considered to have been composed primarily by Canadians?
OMDC does not split tracks on a recording, so all of the composers on a track would have to be Canadian for that particular song to be considered as composed primarily by Canadians.
4. I cannot get in touch with the artist to sign the OMDC declaration form. Is a copy of a Canadian passport sufficient to confirm that the artist is a qualified Canadian?
A copy of a valid Canadian passport will confirm an artist’s citizenship, however, you must also demonstrate that the artist was ordinarily resident in Canada, both when the contract was signed and when the master was completed. In cases where an artist has not signed the OMDC declaration form, companies have provided items such as a copy of the artist’s driver’s license to demonstrate that they were ordinarily resident in Canada at the relevant times.
5. What is considered as “government assistance” for the OSRTC (and would therefore grind the tax credit)?
Government assistance means assistance from a government, municipality, or other public authority in any form, including a grant, subsidy, forgivable loan, and deduction from tax and investment allowance, but does not include assistance received from a private fund or source. For example, funding amounts received from FACTOR would not be considered government assistance as FACTOR’s funding is made up of a blend of private and public monies. Please note that amounts from the Ontario Music Fund (OMF) which OMDC administers would be considered assistance. You cannot receive the OSRTC on expenditures for which you have received the OMF. Also, please note that the CRA will do a final determination of your OSRTC claim, including the amount of government assistance.
6. There is a new administration fee structure for the other tax credits, will this also apply to the OSRTC?
Effective April 1, 2017 there is a new administration fee structure for tax credits which will offset the cost of administering the program. However, the OSRTC administration fee is not affected.
As previously announced, effective January 1, 2017 there is an additional filing fee of $100 applied to applications for the first Certificates of Eligibility for the recording received more than 24 months after the first year-end of the claim. As well, there is a fee of $100 for each Amended Certificate requested.
7. Will Canada Revenue Agency (CRA) process incomplete corporate tax return filings?
The CRA will not process a claim until it is ‘complete’. A claim is considered ‘complete’ when all of the following documentation are filed with the CRA: a T2 Corporation Income Tax return; a completed Schedule 562 (T2SCH562) for each sound recording; and an OMDC certificate of eligibility (or copy) for each sound recording. A copy of the certificate of eligibility and a completed T2SCH562 must be included with the T2 Corporation Income Tax return for each year a claim is made in respect of each sound recording.
8. I submitted my application before January 1, 2017 will I be subject to the new tax credit administration fee structure?
The additional filing fee and fee for Amended Certificates 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.
9. 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 email firstname.lastname@example.org 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.