Ontario enhances the digital media tax credits for large video game
developers

A welcome change: PricewaterhouseCoopers LLP

TORONTO , Oct. 23 /CNW/ - PricewaterhouseCoopers (PwC) in Canada is pleased to welcome some changes announced yesterday, October 22 , in Ontario's Fall Economic Statement, which supports large, specialized video game developers that are developing eligible interactive digital media games in Ontario.

Retroactive from March 27, 2009 , the tax credit provides certified game developers that incur at least $1 million of Ontario labour expenditures per year in the development of eligible interactive digital media games a 35% Ontario Interactive Digital Media Tax Credit on Ontario salaries and wages. A certified game developer generally would have at least 80% of Ontario payroll or 90% of annual revenues attributable to interactive digital media game development.

According to Tracey Jennings , leader of the PwC Canada Entertainment and Media practice, "We have long advocated changes to the tax incentives to encourage use of the talent pool located here. The government's numerous enhancements to the incentives over the past few years were not sufficient for video game developers; video games take a long time to develop (up to five years for some of the more serious games), and access to capital is essential throughout the development cycle. The existing incentives could only be claimed when the game was completed."

These latest changes further notes Jennings, "positions Ontario to become a centre of excellence for the development of digital media by allowing specialized game developers to claim the tax incentives annually."

Video games revenue has grown even through the recession. PwC's Global Entertainment & Media Outlook 2009-2013 showed the Canadian video game market to be growing at 24% in 2008. PwC forecast that it will remain one of the fastest growing segments through 2013, propelled by changing consumer behaviour and enabling technologies.

For more film, video and digital media incentives see PwC's "The Big Table of Film and Video Incentives" and "Big Table of Digital Media and Animation Incentives," at www.pwc.com/ca/bigtable.

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For further information: Carolyn Forest, [phone], [email protected]; Kiran Chauhan, [phone], [email protected]