The FTTC credit may be claimed by an eligible production corporation.

Please see the following bulletin for more information on the eligibility requirements:

• CIT 009, British Columbia Film and Television Tax Credit

A complete eligibility certificate application must be received by British Columbia Film within 30 months from the end of the corporation's fiscal year in which principal photography began. Failure to comply with this requirement will result in the eligibility certificate for the production.

An eligible production corporation should apply for a completion certificate as soon as the production is completed. A completion certificate application must be received by British Columbia Film within 30 months from the end of the corporation's fiscal year in which principal photography began.

All documents and information required by British Columbia Film within this 30 month timeframe. We suggest you submit your application and documentation as early as possible so British Columbia Film has time to review your application and notify you if you are missing any documents or information. Please refer to the checklist on the British Columbia Film website for all information required.

British Columbia Film processes the applications for eligibility and completion certificates. The certifying authority is the Minister of Tourism, Culture and the Arts, who will determine eligibility for the certificates requested.

The Canada Revenue Agency (CRA) reviews and audits claims and issues refund cheques where appropriate. If a corporation disagrees with the amount of credits assessed by the CRA, a Notice of Objection should be filed with the CRA within 90 days of the date of the Notice of Assessment.

For more information concerning eligibility, applications and certificates, please contact British Columbia Film at:

Telephone: 604-736-7997
Fax: 604-736-7290

The definition of BC–based individual has been changed for productions with principal photography beginning after February 19, 2008. This change may now permit individuals who were not resident in British Columbia in the year prior to the start of principal photography to still have their salary and wages eligible for the film and television tax credits. The revised definition is based on the individual's residency on December 31st of the year preceding the end of the tax year for which a tax credit is being claimed.

Production corporations are still required to gather documentation to support the residency of an individual whose labour is being claimed. In cases where the production is completed in one calendar year and the tax year end falls in the following calendar year, production corporations are not required to gather information from individuals who may no longer be employed with them. Supporting information provided at the start of the production is acceptable in these cases, provided that after reasonable enquiry, the production corporation has no reason to believe the residency status of the individual has changed at the end of the production or calendar year. For example, if a production corporation mails a T4 to an address outside of BC or assists the individual in obtaining a temporary work permit in British Columbia, this would suggest that the individual may be a non BC–based individual for the purposes of the film tax credit claim for that taxation year.

Example: A production starts principal photography in April 2008 and wraps production in November 2008. The production corporation's fiscal year end is March 31, 2009. BC-based individual would be determined based on residency on December 31, 2008. However, as this date is after the date the production has wrapped, the corporation should obtain residency information at the start of or during the production. The corporation is not required to track residency of their employees or contractors after the completion of the production for the purposes of the British Columbia film tax credit programs. In this example, the individual's residency as of December 31, 2007 would apply for existing residents of British Columbia. In addition, in this example, if an individual moves to British Columbia in 2008 and remains a resident of British Columbia as of December 31, 2008, their labour would qualify for the British Columbia film tax credit programs.

The proof of residency commonly gathered will continue to qualify under the revised rules i.e. resident in British Columbia on December 31st in the year prior to principal photography start date. For productions with tax years that straddle December 31st, a corporation would be looking at residency of the individuals for the calendar year prior to the fiscal year they are making their claim. This could mean for multi-year productions, the individual's residency could be determined in the year prior to principal photography start date or it could be determined as of December 31st of the first or second calendar years after principal photography started. For multi-year productions, a corporation is not require to continue gathering supporting documentation on the same individuals for each calendar year, if it has no reason to believe the individual's residency status has changed for any of the years.

If an individual moves to British Columbia in the year, their labour would become eligible for the following fiscal year's claim i.e. an individual moves to British Columbia in 2008, the production corporation can claim their labour for the 2009 and subsequent fiscal year claims.

The 3D filming process involves two cameras set together filming a scene simultaneously. Normally one camera is stationary and the second camera can be adjusted from side to side or up and down to capture the shot required. The two cameras are digital cameras and feed the digital images to storage media or to computers. The digital images captured from both cameras are then manipulated with the use of specialized computer programs to create the 3D effect that is desired. These manipulations include combining the two shots for alignment, depth perception adjustments, various convergence adjustments, vertical correction, flare reduction, rotoscoping and other visual effects functions.

The 3D conversion process involves the digital conversion of two-dimensional (2D) media into 3D media. The changeover from 2D to 3D is accomplished utilizing stereoscopic view interpolation that creates the illusion of 3D without the two separate camera angles used to create traditional native 3D content. The interpolation process analyses the position and motion characteristics of objects in a sequence of video frames and uses depth estimation to render stereoscopic views. The resultant image is essentially a visual effect composed from the cumulative use of various digital toolsets.

3D or stereoscopic filming or conversion (3D) may be eligible for the DAVE tax credit, provided the shots are manipulated after shooting for depth perception and other visual effect properties. The wages, salaries and remuneration paid to BC-based individuals performing the 3D associated post-production functions may qualify as BC labour expenditures for the purposes of calculating the DAVE tax credit. Please note, only the individuals using digital technology for the 3D process will qualify for the "digital" component of the credit for the purposes of determining primarily digital. The fact that a production is made entirely using 3D processes does not make the production automatically 100% DAVE eligible. The primarily digital determination must be performed to determine the amount of DAVE eligible activities for the production.

Estimates to complete costs are not permitted as a production cost. CRA’s Application Policy FAS 2008-02 provides additional information regarding interest expenses in relation to the Canadian Film or Video Production Tax Credit. This policy also applies to the British Columbia FTTC.

CRA’s Application Policy FAS 2008-02 discusses what interest expenses are included in the production cost limit for purposes of the Canadian Film and Video Production Tax Credit (CPTC). This policy also applies to the British Columbia FTTC.

The cost of borrowing money (i.e. interest paid pursuant to the legal obligation and expenses such as financing and annual fees), may be capitalized and added to the capital cost of the production, provided an election is made according to subsection 21(1) of the Federal Income Tax Act (federal Act). The production corporation may continue to capitalize these amounts in subsequent years according to subsection 21(3) of the federal Act.

One difference between the federal and BC film tax credit programs is for the purpose of the FTTC program, the unused labour expenditures can only be claimed in the subsequent year according to the definition of “BC labour expenditure” under section 79(1) of the British Columbia Income Tax Act (BC Act). Therefore, under the FTTC program, a production corporation can only capitalize interest expenditures in one subsequent taxation year after the production has completed and no further BC labour expenditures have been incurred.

Please refer to CRA’s Application Policy FAS 2009-01, which provides detailed information on allowable producer fees for the purposes of the federal and British Columbia film tax credits.

The BC film tax credit programs are calculated based on labour expenditures made to BC-based individuals. The kit rental charges are not direct labour expenditures as they are paid for the rental of the equipment or tools and not for the individual’s labour. Therefore, under the BC Act, these amounts are not eligible to be included in the calculations for eligible labour expenditures.

However, if the kit rental is paid to an employee and is included as a taxable benefit to the employee on their T4 and the relevant source deductions have been taken, kit rentals will be allowed to be included as an eligible labour expenditure. CRA’s Application Policy FIS 2006-01 provides further information on the inclusion of taxable benefits as labour expenditures.

If an individual is being paid as a contractor, the kit rentals are not permitted as eligible labour expenditures.