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Hollywood & TV Tax Credit to be cut by B.C. British Columbia’s thriving film and television sectors

By  Acton Accounting |   | Posted in " Accountants, accounting services, bookkeepers, bookkeeping services, corporate tax, May 2016, personal tax, Tax & Benefits, Tax accountants, tax filing, tax return preparation, tax services "

tax accountant vancouver
Source: Vancouver Business (Credit: 20th Century Fox)

In the past couple of years, our entertainment industry has witnessed a boom. The world-class film, television, visual effects and animation industries have been capable of supporting major feature-length projects here. We have seen many recent high-profile Hollywood productions including Deadpool and Star Trek Beyond shot in BC. And, if we talk about TV shows, we can’t help but mention, The Flash, Arrow, The Man in the High Castle and of course, Once Upon a Time.

The province is really proud of the success that the industry right now enjoys! The industry’s prosperity seems evident by the increased demand for shooting and the unavailability of the studio spaces.

B.C. says no to high subsidy credits for the prospering industry

Driven by the flourishing activity of Hollywood & TV industry in B.C., the government of British Columbia thinks it is fair to decrease the film and television tax credit available to the industry soon by October 1, 2016. This step will bring in a projected $100 million in annual savings to the government.

Tax Credit Cut… But by what rate?

The tax credits for film productions, animation and visual effects will be cut by 5 percent. This means that the film and television tax credit which was earlier 33 percent will now be 28 percent only. The province thinks that this is a justified step to help benefit the other sectors of the economy.

Fair deal well made!

Initially, there was a doubt that cutting down the tax credit could make production costs so high so as to drive Hollywood producers out of British Columbia soon. However, according to Pete Mitchell, the president of Vancouver Film Studios, the government consulted with key players in the industry before arriving at a firm decision.

The B.C. government has announced the decision only after discussing & settling the numbers with the film industry. When both the parties thought that they have finally come to a reasonable balance, things got finalized!

If we talk about whether a rollback on the tax credits was a satisfactory move or not, we will get mixed opinions. But the deal is about attaining the twin goals of minimizing the government expenditure without seriously affecting the jobs of this sector. The B.C. government is positive about the decision being the best! The province is sure that the film & TV industries will continue to enjoy the growth & success that they have in the past! And if ever the decision puts a negative impact on the film & TV industry, the province always has the option to adjust the rate later!

So, all the production houses out there, if you’re to begin filming after October 1st this year, get ready to get the new rate.

If you want to optimize your tax liability or file your tax returns, read more about tax service.

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