Ontario sound recording tax credit

This credit is ended.

Expenditures incurred after April 23, 2015, will only qualify for the credit if:

• the eligible sound recording started before April 23, 2015
• the expenditures were incurred before May 1, 2016
• the corporation did not receive an amount from the Ontario Music Fund in respect of the expenditures.

The Ontario sound recording tax credit is a refundable tax credit equal to 20% of the qualifying expenditures incurred during a tax year by an eligible sound recording company. The expenditures must be incurred by the corporation within 24 months from the date that the first eligible expenditure was incurred for the eligible Canadian sound recording.

• Qualifying expenditures
• Eligible corporations
• Claiming the credit

Qualifying expenditures

Qualifying expenditures include expenditures incurred primarily in Ontario in:

• the production of the recording
• the production of the qualifying music video
• the marketing of the recording

Qualifying expenditures also include 50% of the last two types of expenditures if incurred outside Ontario.

These qualifying expenditures are reduced by any assistance reasonably related to these expenditures.

Eligible corporations

You can get a certificate of eligibility from the Ontario Media Development Corporation. To be eligible for the Ontario sound recording tax credit, a corporation must meet certain criteria, including:

• be a Canadian-controlled corporation throughout the tax year under sections 26 to 28 of the Investment Canada Act
• be primarily engaged in the carrying on of a sound recording business primarily through a permanent establishment in Ontario
• have earned less than 50% of its taxable income in the previous tax year outside Ontario
• not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario)

Claiming the credit

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the sound recording is eligible, the OMDC will issue a certificate of eligibility. You must apply online to the OMDC.

To claim the credit, file the following with your T2 Corporation Income Tax Return for the year for each eligible Canadian sound recording:

• a certificate of eligibility (or copy) issued by the OMDC
• a completed Schedule 562, Ontario Sound Recording Tax Credit

If you file your return electronically, send a paper copy of the certificate of eligibility issued by the OMDC to the appropriate Film Services Unit (FSU). The location of the production corporation’s books and records usually determines which FSU will handle the review of your claim.

If you file a paper return, send the return and required attachments to your tax centre.

On line 464 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the total amount of the credit you are claiming.

The CRA will not begin to process the media tax credit claim until it receives all of the required documentation. A claim is considered to be complete when all of the above documentation is filed with the CRA.

For more information, see Schedule 562, section 94 of the Taxation Act, 2007 (Ontario), and After you file your claim.

Forms and publications

• Schedule 562, Ontario Sound Recording Tax Credit
• Schedule 5, Tax Calculation Supplementary – Corporations

Government partners

• Ontario Ministry of Finance

• Ontario e-Laws

Date modified:

2017-04-20