Nature of the tax measure

This refundable tax credit is granted in accordance with “the eligible labor expenditures” paid by the corporation during the fiscal year. These expenditures include the total of the following, less the amount of any government or non-government assistance attributable to the labor expenditures:

• Salaries and wages for the production of eligible multimedia titles paid by the corporation during the year to its eligible employees at an establishment in Quebec for eligible production work in respect of those titles;
• The portion of the consideration paid, for eligible production work, to a subcontractor that was not at arm’s length at the time the contract was entered into and can be reasonably attributed to salary or wages chargeable to those titles paid to its eligible employees at an establishment in Quebec;
• 50% of the portion of the consideration paid to a subcontractor that was at arm’s length at the time the contract was entered into for eligible production work related to eligible multimedia titles and executed on its behalf during the year by the employees at an establishment in Quebec;
• A $100,000 cap applies to an eligible labor expenditure incurred in the year and paid to an eligible employee of the corporation or of a subcontractor with which the corporation has a non arm’s-length relationship. However, this cap will not apply to 20% of such eligible employees.

The corporation must enclose with its tax return the form prescribed by Revenu Québec within 18 months following the end of its fiscal year.

Eligible corporations for the Multimedia Title tax credit

An eligible corporation for a taxation year is a corporation that has an establishment in Quebec where it operates a multimedia-title production business there. In this regard, Investissement Québec determines if a corporation is the producer of the titles and issues an eligibility certificate.

1. Eligible multimedia titles

All titles must be produced for commercial distribution purposes, be produced in an electronic medium, be run using software that supports interactivity, and present at least three of the following four types of data: text, sound, still images, moving images. The whole multimedia title, not only a part of it, must be interactive. It should ensure that the user becomes a participant, and not simply a reader or spectator.

2. Eligible production work

“Eligible production work” is work carried out for the purpose of completing the production stages of the title, commencing with the design stage and concluding 36 months after the date of the initial marketing of the title.