INCENTIVES

The Ontario Media Development Corporation (OMDC) provides a number of generous tax incentives to develop games in Ontario. The following represent important new incentives designed to grow the interactive digital media sector in Ontario, Canada.

• Ontario provides a 40% refundable tax credit on qualifying Ontario labour for corporations that develop and market their own eligible products in Ontario, regardless of size. Interactive digital media products include websites, games, e-learning and other products used to entertain, inform, and educate. This credit significantly reduces the cost of developing these products in Ontario.
• Companies developing eligible products on a fee for service basis will now be eligible for a refundable tax credit of 35% of qualifying labour. Larger companies, incurring a minimum of $1 million of eligible labour costs over a 36 month period in Ontario, qualify for these credits without needing to deal at arm's length with the purchaser or develop all, or substantially all, of the product in Ontario.

The Government of Canada provides a very generous SR&ED incentive.

• The SR&ED program is a federal tax incentive program, administered by the Canada Revenue Agency (CRA) that encourages Canadian businesses of all sizes, and in all sectors to conduct research and development (R&D) in Canada. It is the largest single source of federal government support for industrial R&D. The SR&ED program gives claimants cash refunds and/or tax credits for their expenditures on eligible R&D work done in Canada.