Digital Animation Tax Credit

The credit first reduces the income tax payable and any excess amount is paid to the corporation.

Tax credit amount

The base tax credit is the lesser of:

• 50% of the eligible Nova Scotia labour expenditure less the value of any assistance received
• 25% of eligible Nova Scotia labour expenditure plus eligible overhead expenditure (calculated as 65% of the eligible Nova Scotia labour expenditure) plus 65% of eligible remuneration less twice the value of any assistance

An additional tax credit of 17.5% is available on eligible Nova Scotian animation labour expenditures (for example, labour directly related to animation specific activities).

Application for Tax Credit Certificates

Submit a mandatory Part A application to apply for an Eligibility Certificate. Part A applications must be submitted before you start principal photography or key animation of the digital animation production.

• Digital Animation Tax Credit - Part A Application Form (XLSX)

Submit a mandatory Part B application to apply for a Tax Credit Certificate. Part B applications can be submitted once you have an Eligibility Certificate (Part A approval) and have completed your production. This must be submitted no later than 30 months after the end of the tax year in which expenditures for any eligible digital animation productions were made.

• Digital Animation Tax Credit - Part B Application Form (XLSX)

You may need to provide additional supporting documents (including a producer affidavit, certificate of election and declarations of residency).

• Digital Animation Tax Credit Additional Forms (PDF)

Once you receive your Tax Credit Certificate, you can claim the tax credit on the corporation's T2 Corporation Income Tax Return with Canada Revenue Agency.

Before you start

Make sure you review detailed criteria in the Digital Animation Tax Credit Guidelines (PDF).