OIDMTC

Are you eligible for the Ontario Interactive Digital Media Tax Credit?

 

The OIDMTC is a refundable tax credit for corporations developing interactive digital media products. You must fulfill the below criteria in order to qualify:

 

• Primary purpose is to educate, inform or entertain the user (i.e. video games, e-learning programs, informational products)

• Product must include two of text, sound or images

• Product is used by individuals

• User can select which information is presented and the sequence

• All or substantially all development work was performed in Ontario by Ontario tax payers

• Canadian or foreign owned that develops product at a permanent establishment in Ontario

• Files an Ontario corporate tax return

The basic criteria are as follows: the product must primarily be for informational, educational or entertainment purposes and use two of text, images or sound to achieve the primary purpose. “Operating Systems” (i.e., frameworks, software tools, etc.), pure streaming video or audio, and advertisements are ineligible. Thus, typically the product must have content.

 

Products that primarily promote a company, their products or services are ineligible. The product needs to be substantially (90% or more) developed by the qualifying corporation in Ontario. Labour needs to be rendered at a permanent establishment in Ontario and labour expenditures must be paid out no later than 60 days after the corporation’s fiscal year end for that specific completed product. Products that are primarily for social networking, advertising or interpersonal communication are ineligible for the OIDMTC. The product also needs to be completed or commercially exploitable (or “shelf-ready”) to be eligible for the OIDMTC. The product must be intended for sale or license and either the sale or license must be to an arm’s length party.

Applications are submitted based on the corporation’s fiscal year end date and as such many products may be included in one application. The application fee is calculated as 0.01% of all expenditures and is a minimum of $100 and a maximum of $2000. The OIDMTC is administered by the Ontario Media Development Corporation.