BC IDMTC stands for British Columbia Interactive Digital Media Tax Credit. The tax credit is also referred to as the IDMTC or Interactive Digital Media Tax Credit.
The Interactive Digital Media Tax Credit (IDMTC) is a tax credit based on eligible British Columbia wages and salary claimed by a qualifying corporation with respect to interactive digital media products. The program was initiated on August 31, 2010 and was originally scheduled to close on September 1, 2015, but is currently extended until September 1, 2023.
Yes. The BC IDMTC is a refundable tax credit, which means the amount of the credit, less any British Columbia taxes payable, will be paid to the qualifying corporation.
The IDMTC is administered by the Income Taxation Branch of the British Columbia Ministry of Finance. The Canada Revenue Agency (CRA) is responsible for reviews and audits of claims under the program and will also be responsible for issuing cheques where appropriate.
The IDMTC program is refundable at a rate of 17.5% on eligible wages and salary incurred by eligible corporations, developing interactive digital media products in British Columbia.
A corporation can register for the IDMTC if it meets all of the criteria below: • has a permanent establishment in British Columbia; • is a taxable Canadian corporation for the duration of the fiscal year; • has more than $100,000 of eligible wages and salaries; AND either • its principal business is developing interactive digital media products, OR • all or substantially all of its business consists of: (a) developing interactive digital media products; and/or (b) providing eligible activities to corporations that have a permanent establishment in BC and whose principal business is developing interactive digital media products.
A corporation cannot register for the IDMTC for a given tax year if it has or is: • exempt from taxes, or has taxable income exemptions • a labour-sponsored venture capital corporation • a registered employee share ownership plan • a registered employee venture capital corporation • a registered small business venture capital corporation • a registered eligible business corporation • controlled directly or indirectly in any manner by one or more of the above corporations • claims a BC SR&ED tax credit for the given tax year • a personal services business.
Interactive Digital Media (IDM) products are the only products allowed to be claimed under the IDMTC. An IDM product for the purposes of the IDMTC is a product developed in British Columbia, made for use by an individual, the primary purpose of which is to educate, entertain or inform. The product must include a combination of at least two methods of presenting information: (i) text, (ii) sound and (iii) images. This may include video games, educational software, edutainment products, simulators such as flight or driving etc.
Certain products are specifically excluded as per the IDMTC regulations. Products that are: • operating system software • designed to be used for interactive communication • classified by the Entertainment Software Rating Board as “AO” (Adults Only) • designed for marketing or promoting an entity, product or idea or • which may be contrary to public policy.
Under the BC IDMTC, wages and salaries directly attributable to the development of an IDM product are eligible. Further, wages and salaries must be: 1. incurred on or after September 1, 2010; 2. directly attributable to eligible activities; and 3. paid to individuals who were resident in BC on December 31 of the year preceding the end of the corporation’s tax year. In addition, eligible salaries and wages are reduced by any assistance, other than the Federal SR&ED program. IDMTC eligible wages and salaries do not include: • Stock options; • Amounts paid to specified employees (i.e. persons holding 10% or more of the shares of the company) which are (a) based on profits or a bonus, (b) are in excess of five time the year’s maximum pensionable earnings • Amounts paid to employees for performing marketing, human resource services, administrative support services, or management services • Amounts paid to contractors or sub-contractors
Marketing, human resource services, administrative support and management support expenditures are not eligible under the program.
There is no expenditure limit with respect to the BC IDMTC. However, a minimum $100,000 must be spent on eligible salaries and wages per fiscal year in order to apply.
BC IDMTC is claimed on an annual basis. An application (Schedule 429) must be filed with the CRA within 18 months of the end of a corporation’s fiscal year. A T2 must also be filed with the CRA for given fiscal year. Applications filed after the 18 month deadline will not be accepted.
The amount of the fee is based on the number of employees at the end of the corporation’s previous taxation year. If the corporation has no previous taxation year, the lowest fee will apply.
Number of Employees*
Amount
0 – 4 (Or no previous tax year end)
$1,000
5 – 9
$2,500
10 or more
$5,000
* ‘Employees’ include all full or part time equivalents.
Mobile Capital Network provides a comprehensive IDMTC filing service. MCN consultants will prepare the application including all of the necessary costing schedules as well as other required materials. Once submitted, MCN will track the application to ensure that the application is processed as quickly as possible.
For more information regarding MCN and the services it provides in support of the BC IDMTC, please contact us.
Mobile Capital Network is a national strategy consulting practice, headquartered in Toronto, Ontario, and the offices in Vancouver, BC, and Calgary, Alberta. MCN has consultants and clients nationwide. However, please note that the BC IDMTC is only available to organizations that have an operation and incur eligible expenditures in British Columbia.
What does BC IDMTC stand for?
BC IDMTC stands for British Columbia Interactive Digital Media Tax Credit. The tax credit is also referred to as the IDMTC or Interactive Digital Media Tax Credit.
What is the BC IDMTC?
The Interactive Digital Media Tax Credit (IDMTC) is a tax credit based on eligible British Columbia wages and salary claimed by a qualifying corporation with respect to interactive digital media products. The program was initiated on August 31, 2010 and was originally scheduled to close on September 1, 2015. The 2015 BC Provincial Budget extended the program until August 31, 2018.
Is the BC IDMTC refundable?
Yes. The BC IDMTC is a refundable tax credit, which means the amount of the credit, less any British Columbia taxes payable, will be paid to the qualifying corporation.
Who administers the BC IDMTC?
The IDMTC is administered by the Income Taxation Branch of the British Columbia Ministry of Finance. The Canada Revenue Agency (CRA) is responsible for reviews and audits of claims under the program and will also be responsible for issuing cheques where appropriate.
What is the refund rate of the IDMTC?
The IDMTC program is refundable at a rate of 17.5% on eligible wages and salary incurred by eligible corporations, developing interactive digital media products in British Columbia.
Which corporations can file a BC IDMTC claim?
A corporation can register for the IDMTC if it meets all of the criteria below: • has a permanent establishment in British Columbia; • is a taxable Canadian corporation for the duration of the fiscal year; • has more than $100,000 of eligible wages and salaries; AND either • its principal business is developing interactive digital media products, OR • all or substantially all of its business consists of: (a) developing interactive digital media products; and/or (b) providing eligible activities to corporations that have a permanent establishment in BC and whose principal business is developing interactive digital media products.
Are any corporations disallowed from filing an IDMTC claim?
A corporation cannot register for the IDMTC for a given tax year if it has or is: • exempt from taxes, or has taxable income exemptions; • a labour-sponsored venture capital corporation; • a registered employee share ownership plan; • a registered employee venture capital corporation; • a registered small business venture capital corporation; • a registered eligible business corporation; • controlled directly or indirectly in any manner by one or more of the above corporations; • claims a BC SR&ED tax credit for the given tax year; • a personal services business.
What products are eligible for the IDMTC?
Interactive Digital Media (IDM) products are the only products allowed to be claimed under the IDMTC. An IDM product for the purposes of the IDMTC is a product developed in British Columbia, made for use by an individual, the primary purpose of which is to educate, entertain or inform. The product must include a combination of at least two methods of presenting information: (i) text, (ii) sound and (iii) images. This may include video games, educational software, edutainment products, simulators such as flight or driving etc.
Are there any other eligibility criteria?
Certain products are specifically excluded as per the IDMTC regulations. Products that are: • operating system software; • designed to be used for interactive communication; • classified by the Entertainment Software Rating Board as “AO” (Adults Only); • designed for marketing or promoting an entity, product or idea; or • which may be contrary to public policy.
What expenditures are eligible under the program?
Under the BC IDMTC, wages and salaries directly attributable to the development of an IDM product are eligible. Further, wages and salaries must be: 1. incurred on or after September 1, 2010; 2. directly attributable to eligible activities; and 3. paid to individuals who were resident in BC on December 31 of the year preceding the end of the corporation’s tax year. In addition, eligible salaries and wages are reduced by any assistance, other than the Federal SR&ED program. IDMTC eligible wages and salaries do not include: • Stock options; • Amounts paid to specified employees (i.e. persons holding 10% or more of the shares of the company) which are (a) based on profits or a bonus, (b) are in excess of five time the year’s maximum pensionable earnings • Amounts paid to employees for performing marketing, human resource services, administrative support services, or management services • Amounts paid to contractors or sub-contractors
Are marketing expenses are eligible?
Marketing, human resource services, administrative support and management support expenditures are not eligible under the program.
Are there any expenditure limits?
There is no expenditure limit with respect to the BC IDMTC. However, a minimum $100,000 must be spent on eligible salaries and wages per fiscal year in order to apply.
When should an IDMTC application be filed?
BC IDMTC is claimed on an annual basis. An application (Schedule 429) must be filed with the CRA within 18 months of the end of a corporation’s fiscal year. A T2 must also be filed with the CRA for given fiscal year. Applications filed after the 18 month deadline will not be accepted.
How much is the application fee?
The amount of the fee is based on the number of employees at the end of the corporation’s previous taxation year. If the corporation has no previous taxation year, the lowest fee will apply.
The amount of the fee is based on the number of employees at the end of the corporation’s previous taxation year. If the corporation has no previous taxation year, the lowest fee will apply. No. of Employees* Amount 0 – 4 (Or no previous tax year end) $1,000 5 – 9 $2,500 10 or more $5,000
* ‘Employees’ includes all full or part time equivalents.
What IDMTC services does MCN provide?
Mobile Capital Network provides a comprehensive IDMTC filing service. MCN consultants will prepare the application including all of the necessary costing schedules as well as other required materials. Once submitted, MCN will track the application to ensure that the application is processed as quickly as possible.
How does MCN bill for its IDMTC service?
For more information regarding MCN and the services it provides in support of the BC IDMTC, please contact us.
In which provinces does MCN provide its services?
Mobile Capital Network is a national strategy consulting practice, headquartered in Toronto, Ontario, and the offices in Vancouver, BC, and Calgary, Alberta. MCN has consultants and clients nationwide. However, please note that the BC IDMTC is only available to organizations that have an operation and incur eligible expenditures in British Columbia.
In which provinces does MCN provide its services?
Mobile Capital Network is a national strategy consulting practice, headquartered in Toronto, Ontario, and the offices in Vancouver, BC, and Calgary, Alberta. MCN has consultants and clients nationwide. However, please note that the BC IDMTC is only available to organizations that have an operation and incur eligible expenditures in British Columbia.
