ANNOUNCEMENT 01 Oct 2016In October 2016, the government of Canada/Province of British Columbia announced a targeted tax change.
NUMBER OF INTERVENTIONS
On May 2, 2016, Finance Minister Michael de Jong announced that the government of British Columbia would reduce the level of subsidies provided under the province's film tax credit. The government had announced with Budget 2016 its intention to work with the film and television industry to address the rising cost of the province's production services tax credit for film and television.
Under the current rates, the subsidy was forecast to cost nearly $500 million in 2015-16, up from an average of $313 million in the prior three years. Subject to the approval of the legislature and the implementation of the necessary regulations, for principal photography beginning on or after October 1, 2016, the basic production services tax credit rate will be set at 28%, down from 33%, and the digital animation or visual effects (DAVE) tax credit rate will be set at 16%, down from 17.5%.
The Province is providing a transitional period to recognize the investments already planned for British Columbia. For example, the amendments will allow all episodes in one season of a television series to continue at the current tax credit rates if principal photography for the first episode begins prior to October 1, 2016.
These reforms were then enacted as part of Bill 25-2016, the 'Miscellaneous Statutes (General) Amendment Act, 2016,' enacted May 12, 2016.