It’s a challenge no matter which way you put it – If you are an independent in Canada and have projects in film, televison and animation tax credit capital, your own form of film tax breaks! will help eliminate what we can only describe as some of the ‘guerrilla financing ‘ techniques that owners of projects must employ to complete an efficient and effective return on investment for owners .
The financing of a film or the project (we always talk in terms of the holy three, film, TV and animation) should of course be in place prior, not during or after your project. Future revenue streams will of course come from a potential theatre release, DVD sales, and release to cable and satellite providers.
Cash flows from your project are of course used to repay investors, and a significant portion of there cash flow and actual working capital of your project can come from tax credit financing in Canada.
Have the tax credits for the industry ever been so generous and the processes streamline – we certainly can’t remember.
Clients typically seeking tax credit financing (in their words ‘ film tax breaks’) usually have claims in excess of 200k to finance, and they are of course in possession of valid refundable credits.
How can these claims be monetized, and what type of financing is available. In general you can receive loan advances in the range of 70-80% of your total calim amount. The key collateral is of course the actual refund itself, and financing is offered and available to clients who wish to cash flow their claims either during or on completion of the project. It goes to say that if you cash flow your claim during the project the financing of the tax credit becomes a key part of the cash flow of the project.
Criteria that you might expect when you do a financing of this type would be things such as due diligence on the owners and their industry background, your ability to produce relevant financials and budgets on your project, and the further ability of owners to ensure all relevant filings and tax payments are being made and up to date . That’s just business 101 we would say to clients, and that type of info and due diligence would be part of any business financing.
For the financing of projects to attain the maximum level of… can we call it ‘ generousity’ of the goverment tax credits its all about Canadian content. It is therefore important to work with a solid and reputable, credible, and experienced Canadian film tax consultant who can steer you towards the preparation and filing of claims that maximize Canadian content. For example one of the key credits is the Production Tax Credit and it can cover up to 25% of labor that qualifies as Canadian content when the labour maxes out at a total of 60% of your entire production budget. In fact there is a basis ‘ point system ‘ that your entertainment accountant would use to ensure you are qualifying for maximum refund. These so called ‘ points’ include items such as Canadian ownership per cent age of the production, as well as focusing, for example, on where post production is completed… and on it goes.
But there is a very simple bottom line… you want ‘film tax breaks’ in Canada. They are here, available, and generous. Speak to an expert advisor in the area who can assist you in qualification, filing, and the cash flowing of that tax credit capital.