Film and Television Tax Credit Regulation

(Consolidated up to 97/2024) alberta regulation 11/2020 Film and Television Tax Credit Act FILM AND TELEVISION TAX CREDIT REGULATION Table of Contents 1 Definitions 2 Completion of production 3 Prescribed production 3.1 Distribution agreement 4 Required information 5 Production plan 6 Excluded productions 7 Reapplication 8 Prescribed amounts for authorization letter 9 Prescribed criteria for authorization letter 10 Prescribed dates for authorization letter 11 Revised authorization letter 12 Prescribed information for tax credit certificate 13 Issuance of new tax credit certificate 14 Prescribed percentage and prescribed circumstances 15 Copyright residency requirements 16 Collection of information 17 Coming into force Definitions 1 (1) In this Regulation, (a) “Act” means the Film and Television Tax Credit Act ; (a.1) “distribution agreement” means, in respect of a project, a contract, agreement or letter under or by which the completed project is to be commercially broadcast or distributed; (b) repealed AR 97/2024 s2; (c) “eligible Alberta costs” of an eligible corporation in respect of a project means the production costs determined by the Minister, to the extent that they are reasonable in the circumstances and do not exceed fair market value, that (i) are directly attributable to the portion of the project that occurs in Alberta, (ii) are incurred in Alberta by the eligible corporation during the eligibility period, (iii) are paid in full by the eligible corporation during the eligibility period, and (iv) are not eligible Alberta salary or wages, eligible non-Alberta salary or wages, eligible Alberta service contract expenditures, eligible non-Alberta service contract expenditures or eligible Alberta tangible property expenditures; (d) “eligible Alberta parent‑subsidiary amount” of an eligible corporation in respect of a project means the eligible Alberta costs, eligible Alberta salary or wages, eligible Alberta service contract expenditures, eligible Alberta tangible property expenditures and, if the project is a documentary production, the eligible non‑Alberta salary or wages, eligible non‑Alberta service contract expenditures and eligible non‑Alberta travel costs paid by the eligible corporation to a parent corporation as a reimbursement of the expenditures of the parent corporation that (i) the eligible corporation and the parent corporation have agreed to treat as expenditures of the eligible corporation, and (ii) would be eligible Alberta costs, eligible Alberta salary or wages, eligible Alberta service contract expenditures, eligible Alberta tangible property expenditures and, if the project is a documentary production, eligible non‑Alberta salary or wages, eligible non‑Alberta service contract expenditures and eligible non‑Alberta travel costs of the eligible corporation if the expenditures had been incurred by the eligible corporation for the same purpose, and had been paid by the eligible corporation at the same time and to the same persons, as they were by the parent corporation; (e) “eligible Alberta salary or wages” of an eligible corporation in respect of a project means the total salary or wages, to the extent that they are reasonable in the circumstances, that are (i) directly attributable to the portion of the project that occurs in Alberta, (ii) incurred in Alberta by the eligible corporation during the eligibility period, and (iii) paid in full by the eligible corporation during the eligibility period to employees of the eligible corporation who are eligible individuals; (f) “eligible Alberta service contract expenditures” of an eligible corporation in respect of a project means the total service contract expenditures, to the extent that they are reasonable in the circumstances and do not exceed fair market value, that are (i) directly attributable to the portion of the project that occurs in Alberta, (ii) incurred in Alberta by the eligible corporation during the eligibility period, and (iii) paid in full by the eligible corporation during the eligibility period; (g) “eligible Alberta tangible property expenditures” of an eligible corporation in respect of a project means the total tangible property expenditures, to the extent that they are reasonable in the circumstances and do not exceed fair market value, where (i) the property is used in Alberta during the eligibility period in a manner that is directly attributable to the portion of the project that occurs in Alberta, (ii) the expenditures are incurred in Alberta by the eligible corporation during the eligibility period, and (iii) the expenditures are paid in full by the eligible corporation during the eligibility period; (h) “eligible individual” means an individual, other than a trust or estate, who resides in Alberta on December 31 of one of the three years immediately preceding the year in which Alberta principal photography begins; (i) “eligible non-Alberta salary or wages” of an eligible corporation in respect of a project means the total salary or wages, to the extent that they are reasonable in the circumstances, that are (i) directly attributable to the portion of principal photography of the project that occurs outside Alberta, (ii) incurred outside Alberta by the eligible corporation during the eligibility period, and (iii) paid in full by the eligible corporation during the eligibility period to employees of the eligible corporation who are eligible individuals; (j) “eligible non-Alberta service contract expenditures” of an eligible corporation in respect of a project means the total service contract expenditures, to the extent that they are reasonable in the circumstances and do not exceed fair market value, that are (i) directly attributable to the portion of principal photography of the project that occurs outside Alberta, (ii) incurred outside Alberta by the eligible corporation during the eligibility period, and (iii) paid in full by the eligible corporation during the eligibility period; (j.1) “eligible non‑Alberta travel costs” of an eligible corporation in respect of a project means the total travel costs, to the extent that they are reasonable in the circumstances and do not exceed fair market value, that are (i) directly attributable to the portion of principal photography of the project that occurs outside Alberta, (ii) incurred outside Alberta by the eligible corporation during the eligibility period, and (iii) paid in full by the eligible corporation during the eligibility period; (k) “eligible partnership” means a partnership where each member is, (i) in respect of a service contract expenditure or tangible property expenditure paid to the eligible partnership, (A) an individual who resides in Alberta on December 31 of the year immediately preceding the year in which an eligible corporation pays the service contract expenditure or tangible property expenditure to the eligible partnership, or (B) a corporation that has a permanent establishment in Alberta and is not tax exempt at the time an eligible corporation pays a service contract expenditure or tangible property expenditure to the eligible partnership, and (ii) in respect of the copyright of a project, (A) an individual who resides in Alberta during the applicable periods referred to in section 15, or (B) a corporation that has a permanent establishment in Alberta and is not tax exempt during the applicable periods referred to in section 15; (l) “federal Act” means the Income Tax Act (Canada); (m) “parent corporation” means a corporation in relation to which an eligible corporation is a subsidiary wholly-owned corporation; (n) “salary or wages” has the same meaning as salary or wages in section 248(1) of the federal Act and is computed in the same manner, regardless of whether the federal Act applies to the eligible individual to whom the salary or wages are paid, but does not include (i) an amount described in section 7 of the federal Act, or (ii) an amount determined by reference to profits or revenues; (o) “service contract expenditure” means an amount paid by an eligible corporation under a service contract to (i) an eligible individual, other than an employee of the eligible corporation, where the amount is attributable to services personally rendered by (A) the eligible individual, or (B) an employee of the eligible individual who is an eligible individual, to the extent that the amount paid under the service contract does not exceed the salary or wages paid to the employee for rendering the services, (ii) an eligible partnership, where the amount is attributable to services personally rendered by (A) a member of the eligible partnership who is an eligible individual, or (B) an employee of the eligible partnership who is an eligible individual, to the extent that the amount paid under the service contract does not exceed the salary or wages paid to the employee for rendering the services, or (iii) a corporation that has a permanent establishment in Alberta at any time during the eligibility period and is not tax exempt, where the amount is attributable to services personally rendered by an employee of the corporation who is an eligible individual, to the extent that the amount paid under the service contract does not exceed the salary or wages paid to the employee for rendering the services; (p) “tangible property expenditure” means the non-refundable payments made by an eligible corporation under a lease of tangible property that are paid to an eligible individual, eligible partnership or corporation that (i) is ordinarily engaged in the business of leasing tangible property of the type leased by the eligible corporation, (ii) carries on business in Alberta, and (iii) at the time the eligible corporation makes each payment under the lease, (A) in the case of an eligible individual, the eligible individual is not an employee of the eligible corporation, (B) in the case of an eligible partnership, no member of the partnership is an employee of the eligible corporation, and (C) in the case of a corporation, the corporation has a permanent establishment in Alberta and is not tax exempt; (q) “tax exempt” means exempt from tax under the Alberta Corporate Tax Act by virtue of section 35 of that Act; (r) “total labour costs” means the portion of the total production costs of a project that is made up of salary or wages, to the extent that they are reasonable in the circumstances, that are (i) directly attributable to the project, (ii) incurred by the eligible corporation during the eligibility period, and (iii) paid in full by the eligible corporation during the eligibility period; (s) “treaty co-production project” means a project whose production is contemplated in a co-production treaty entered into between Canada and another country. (2) In the Act and this Regulation, (a) “designated assistance” means the total amount of assistance an eligible corporation receives or is entitled to receive from an individual, partnership or corporation or from a government, municipality or other public authority that, in the opinion of the Minister, relates to eligible production costs, and such assistance may include (i) a grant, (ii) a subsidy, (iii) a forgivable loan, (iv) an advance other than a recoupable advance, (v) a loan other than a bona fide loan with a set repayment date, (vi) a provincial tax credit, including an Alberta tax credit, (vii) a donation in respect of which the donor has received a benefit, and (viii) in respect of a sponsorship in which there is an exchange of benefits between the sponsor and the sponsored party other than at fair market value, the difference between the amount for which the benefits were exchanged and the fair market value of the benefits, but does not include (ix) a tax credit under the federal Act, (x) a licence fee, (xi) an equity investment, or (xii) an amount deducted under section 26.94 of the Alberta Corporate Tax Act ; (a.1) “eligibility period” means the period beginning on the date that preproduction begins and ending on the earliest of (i) the date specified in an authorization letter under section 4(2)(c) of the Act or a revised authorization letter under section 5(1) of the Act by which an eligible corporation must provide to the Minister the information required under (A) section 6(2) of the Act, if that section is applicable, or (B) section 6.1(2) of the Act in respect of the taxation year in which completion of the project is anticipated, if that section is applicable, and (ii) the actual date of delivery to the Minister of the information required under section 6(2) or 6.1(2) of the Act, as the case may be; (b) “eligible production costs” of an eligible corporation in respect of a project means the total of the following: (i) eligible Alberta costs; (ii) eligible Alberta salary or wages; (iii) eligible Alberta service contract expenditures; (iv) eligible Alberta tangible property expenditures; (v) the eligible Alberta parent-subsidiary amount; (vi) eligible non-Alberta salary or wages, if the project is a documentary production; (vii) eligible non-Alberta service contract expenditures, if the project is a documentary production; (viii) eligible non‑Alberta travel costs, if the project is a documentary production. AR 11/2020 s1;97/2024 Completion of production 2 The final project must be delivered to the Minister in a form and for a sufficient period of time to enable the Minister to verify the final project’s compliance with the Act, this Regulation and any directives or guidelines issued under the Act. AR 11/2020 s2;97/2024 Prescribed production 3 For the purposes of sections 1(l) and 2(d) of the Act, digital media is a prescribed type of production. Distribution agreement 3.1 (1) A distribution agreement must be (a) in a form acceptable to the Minister, and (b) valid, subsisting and enforceable at the time it is provided to the Minister in accordance with this Regulation. (2) Notwithstanding subsection (1)(b), the Minister may accept a conditional distribution agreement for the purposes of section 5(i). AR 97/2024 s4 Required information 4 An application for an authorization letter must contain the following information: (a) the date on which Alberta principal photography is expected to begin; (b) a commercial distribution plan in respect of the final project; (c) a description of any factors that may affect the eligible corporation’s ability to meet, in respect of the project, the requirements of the Act, this Regulation and any directives or guidelines issued under the Act; (d) details of the person or persons that control the eligible corporation; (e) a budget in respect of the portion of the project that occurs in Alberta. AR 11/2020 s4;97/2024 Production plan 5 A production plan must contain the following information: (a) an overview of the project; (b) details of the estimated economic impact of the project on Alberta; (c) details of the estimated impact of the project on the film and television industry in Alberta; (d) the estimated total production costs of the project; (e) the estimated eligible production costs of the project; (f) the estimated designated assistance amount in respect of the project; (f.1) the estimated amounts described in clauses (d), (e) and (f) for each taxation year all or part of which falls in the eligibility period, if the eligible corporation applied under section 3(1)(b) of the Act; (g) the proposed timeline of the project; (h) evidence of sufficient financing to enable the project to reach completion of production; (i) a copy of the distribution agreement; (j) a copy of the chain of title documentation for the project, if section 14(a)(i) applies; (j.1) the estimated number of days when and the locations in Alberta where Alberta principal photography is expected to take place; (k) any other information required by the Minister. AR 11/2020 s5;97/2024 Excluded productions 6 The following types of film or television production are excluded from the application of the Act: (a) news, current events or public affairs programming, or a program that includes weather or market reports; (b) a talk show; (c) repealed AR 97/2024 s7; (d) a sports event or activity; (e) a gala presentation or an awards show; (f) a production that solicits funds; (g) a production that consists all or substantially all of (i) scenes recorded on private or public authority surveillance equipment, or (ii) the recording of official legal, government or other similar proceedings; (h) pornography; (i) advertising; (j) a production that is produced primarily for industrial, corporate or institutional purposes; (k) a production, other than a documentary, all or substantially all of which consists of stock footage; (l) a video game; (m) a production for which public financial support would, in the opinion of the Minister, be contrary to public policy. AR 11/2020 s6;97/2024 Reapplication 7 (1) An eligible corporation that applies for an authorization letter in respect of a project may, within 12 months after being notified under section 4(4) of the Act that the Minister refuses to issue an authorization letter, make one additional application for an authorization letter in respect of the project. (2) Despite section 3(3) of the Act, an eligible corporation may make an application under subsection (1) more than 120 days after Alberta principal photography begins on the project. AR 11/2020 s7;97/2024 Prescribed amounts for authorization letter 8 (1) For the purposes of section 4(1)(b) of the Act, the prescribed amount is $499 999. (2) Repealed AR 69/2021 s2. AR 11/2020 s8;69/2021 Prescribed criteria for authorization letter 9 For the purposes of section 4(1)(c) of the Act, the prescribed criteria or requirements to be met are the following: (a) the economic impacts of the project on Alberta must be satisfactory to the Minister; (b) the impacts of the project on the film and television industry in Alberta must be satisfactory to the Minister; (c) the eligible corporation must meet the onscreen recognition requirements; (d) the eligible corporation must have sufficient financing to enable the project to reach completion of production. AR 11/2020 s9;97/2024 Prescribed dates for authorization letter 10 (1) For the purposes of section 4(2)(b) of the Act, the prescribed date is (a) the date 6 months after the date on which the Minister issues the authorization letter, or (b) another date determined by the Minister if the Minister is of the opinion that circumstances warrant it. (2) For the purposes of section 4(2)(c)(i) of the Act, the date by which an eligible corporation must provide to the Minister the information required under section 6(2) of the Act is (a) the date 42 months after the date on which Alberta principal photography begins or is expected to begin, or (b) another date determined by the Minister if the Minister is of the opinion that circumstances warrant it. (3) For the purposes of section 4(2)(c)(ii)(B) of the Act, the date by which an eligible corporation must provide to the Minister the information required under section 6.1(2) of the Act is (a) the date 42 months after the date on which Alberta principal photography begins or is expected to begin, or (b) another date determined by the Minister if the Minister is of the opinion that circumstances warrant it. AR 11/2020 s10;97/2024 Revised authorization letter 11 (1) An eligible corporation shall apply for a revised authorization letter under section 3(4) of the Act if any of the information referred to in section 4 or 5(f) or (g) changes. (2) The Minister may issue a revised authorization letter where information contained in the original authorization letter is incorrect or for any other similar reasons the Minister considers appropriate. Prescribed information for tax credit certificate 12 (1) For the purposes of section 6(2)(c)(iv) of the Act, the following information in respect of a project is prescribed: (a) a final report in a form approved by the Minister; (b) an audited production cost statement; (c) a copy of the distribution agreement. (2) For the purposes of section 6.1(2)(c)(v) of the Act, the following information in respect of a project is prescribed: (a) where production is not completed in the taxation year, (i) an interim report in a form approved by the Minister, (ii) an interim audited production cost statement in a form acceptable to the Minister, and (iii) a copy of the distribution agreement; (b) where production is completed in the taxation year, (i) a final report in a form approved by the Minister, (ii) an audited production cost statement, and (iii) a copy of the distribution agreement, if not already provided to the Minister under clause (a). AR 11/2020 s12;97/2024 Issuance of new tax credit certificate 13 (1) The Minister shall revoke a tax credit certificate and issue a new tax credit certificate where information contained in the original tax credit certificate is incorrect or has changed since the date the original tax credit certificate was issued or for any other similar reasons the Minister considers appropriate. (2) A tax credit certificate issued under subsection (1) shall replace the original tax credit certificate. (3) A tax credit certificate issued under subsection (1) is deemed to have been issued on the same date that (a) the original tax credit certificate was issued under section 6 of the Act, or (b) the original tax credit certificate for the same taxation year was issued under section 6.1 of the Act. (4) If the Minister issues a new tax credit certificate under subsection (1), the Minister shall promptly give notice to the Finance Minister of the issuance of the new tax credit certificate. AR 11/2020 s13;216/2022;9/2023;97/2024 Prescribed percentage and prescribed circumstances 14 For the purposes of sections 1, 1.1, 2 and 3 of the Schedule to the Act, the prescribed percentage to be used in determining the estimated or actual tax credit amount is (a) 30% in the following circumstances: (i) a project other than a treaty co-production project that meets the following criteria: (A) at least 50% of the project is owned by eligible individuals, whether as individuals, members of a partnership or voting shareholders of a corporation; (B) at least one producer on the project must be an eligible individual; (C) in respect of the copyright of the project, the requirements under section 15 must be met; (D) at least 60% of total production costs for the project must be eligible production costs or at least 70% of the total labour costs for the project must be made up of eligible Alberta salary or wages; (ii) a treaty co-production project that meets the following criteria: (A) at least one producer on the project must be an eligible individual; (B) at least 60% of total production costs for the project must be eligible production costs or at least 70% of the total labour costs for the project must be made up of eligible Alberta salary or wages; (iii) a project of which at least 75% of Alberta principal photography days take place in rural and remote filming locations, and (b) 22% in circumstances other than those set out in clause (a). AR 11/2020 s14;97/2024 Copyright residency requirements 15 (1) For the purposes of section 14(a)(i)(C), the copyright of a project must be held, at least in part, (a) during the period beginning on the date that an eligible corporation applies for an authorization letter and ending on the date of completion of production, (i) by an individual who resides in Alberta on December 31 of the year immediately preceding the year in which the eligible corporation applies for an authorization letter, (ii) by a corporation that has a permanent establishment in Alberta and is not tax exempt at the time that the eligible corporation applies for an authorization letter, or (iii) by a partnership each member of which must be an individual meeting the requirements of subclause (i) or a corporation meeting the requirements of subclause (ii), and (b) during the period beginning on the date of completion of production and ending 10 years after that date, (i) by an individual who resides in Alberta on each December 31 of that period, (ii) by a corporation that has a permanent establishment in Alberta during that period and is not tax exempt, or (iii) by a partnership each member of which must be an individual meeting the requirements of subclause (i) or a corporation meeting the requirements of subclause (ii). (2) For the purposes of section 14(a)(i)(C), if the copyright of a project is transferred during a period of time referred to in subsection (1)(a) or (b), the copyright must be transferred, at least in part, to (a) an individual who resides in Alberta on December 31 of the year immediately preceding the year in which the transfer occurs, (b) a corporation that, at the time the transfer occurs, has a permanent establishment in Alberta and is not tax exempt, or (c) a partnership each member of which must be an individual meeting the requirements of clause (a) or a corporation meeting the requirements of clause (b). Collection of information 16 The Minister may collect indirectly under section 18 of the Act the following information about a member or an employee of an eligible partnership, an employee of an eligible corporation or a parent corporation or an individual referred to in section 1(1)(o)(i): (a) the member, employee or individual’s name; (b) the member, employee or individual’s job description, including position title; (c) the member, employee or individual’s salary or wages, including bonuses; (d) the member, employee or individual’s unique identification number; (e) the member, employee or individual’s work email address; (f) the member, employee or individual’s work address; (g) the member, employee or individual’s work phone number; (h) the amount of designated assistance the eligible corporation has received in respect of the member, employee or individual during the eligibility period; (i) the member, employee or individual’s place of residence at the end of December 31 in any year. Expiry 16.1 For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on June 30, 2029. AR 97/2024 s14 Coming into force 17 This Regulation has effect on the coming into force of the Film and Television Tax Credit Act .