Ontario Interactive Digital Media Tax Credit

On April 23, 2015, the government announced proposed changes to the Ontario Interactive Digital Media Tax Credit (OIDMTC).  This Bulletin provides details about the proposed changes.

Background

The OIDMTC is a refundable tax credit available to qualifying corporations for expenditures related to the creation, marketing and distribution of eligible interactive digital media products. A 40 per cent refundable tax credit is available for qualifying corporations that develop and market their own products.  The credit is 35 per cent for products developed under a fee-for-service arrangement. A 35 per cent refundable credit is also available to qualifying digital game corporations and specialized digital game corporations.

The OIDMTC was introduced in 1998 with broad eligibility criteria to support the growth of Ontario’s emerging digital media industry and the creation of highly skilled jobs.  As interactive digital media products have become mainstream, the existing eligibility criteria of the OIDMTC limit the ability of the credit to target innovative products. 

Between 2003-04 and 2014-15, the OIDMTC is estimated to have grown by over 40 per cent annually. Ontario announced a review of the OIDMTC in the 2014 Ontario Economic Outlook and Fiscal Review. Further to this announcement, the government has held discussions with industry stakeholders on ways to contain costs and modernize support to the industry.

This Bulletin discusses proposed changes to the OIDMTC announced in the 2015 Ontario Budget.

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