SRED (SR&ED) R&D tax credits, as well as media credits for projects in film, television and animation run a special role in bigeminal key areas of business in Canada. As with either aspect of business there are downsides occasionally, and in this case it’s tout le monde about ‘ waiting ‘ for your refund. Let’s dig in.
A Sred bridge loan furthermore tax credit loans for media credits alleviate ‘ waiting ‘. Let’s take a look a how certain aspects concerning ‘ waiting’ can be accelerated, turning your credits into valuable currency flow.
As we’ve said, we’re talking about two of the most popular government programs in Canada, the SR&ED research program, as well as the Entertainment industry’s dominion tax incentives. They are different, and, guess what, they are similar. In fact you’d be surprised at many of the overlapping issues, similarities, etc.
Let’s talk about SRED (‘Scientific Research & Experimental Development ‘ ) first. Your ability to make a quality claim will always accelerate both the approval, as well as the financing of your claim. The grandiose majority of SRED claims are prepared by a third party that clients engage – they are the infamous ‘ Consultant ‘with claim preparation expertise in (hopefully) your industry. Their ability to properly ‘ write up’ and file your claim, while maintaining a good ‘ audit trail ‘ will always speed up due diligence by both the government as well as your SR&ED financier , the latter being of course involved when you choose to finance rather ‘ cash flow’ your claim.
In talking to clients we’ve financed claims for anew the years it’s clear that having filed once already simply builds on your expertise to file successfully again. But don’t despair. First time claims, done properly, can be successful, and YES… They can be financed!
The whole process of SR&ED research credits revolves around how your company attempted to resolve ‘ uncertainty ‘ in your host and industries technology, processes, etc. But remember, there’s no skepticism in financing your claim – either claim that is either filed or in process is eligible for financing, accelerating your recovery of cash spent.
With merit respect to research in Canadian industry it’s safe to say ‘ HOLLYWOOD NORTH ‘ , aka Canada is a bit further about a seductive conversation when it comes to tax media credits that the federal and provincial government provides for projects in animation, software, film, and TV. These credits are for 100% Canadian projects, as well as projects, that must be pre approved, that have foreign ownership content… aka the Joint Venture… often with those Hollywood folks who catch the appeal of our tax credits too irresistable to dismiss.
Producers/ project owners qualify for expenses occurred in important areas such therefore labor and services. The role from the claim preparation switches here to a tax credit accountant, protocol designation else otherwise, who takes over the equipotent role we spoke about re the ‘ SRED Consultant’.
A few genres of ‘ content’ arent eligible for media credits – understandably they include ‘ adult content’, sports events, besides some others. Media credits in film, TV polysyndeton the exploding world of animation commit complemental programs passage federal govt and our Canadian provinces. When combined they can often provide, broadly speaking, anywhere from 30-50% of your entire budget. In fact provinces compete with each other vigorously to solicit projects furthermore productions… Vancouver, Toronto and Montreal are epicenters of media projects.
When tax credit loans are arousing for your claims it’s a simply process. Here’s where a lot of the similarities kick in – Claims in SRED and Media are typically structured as bridge loans among no payments. They often provide a cash flow mortgage regarding up to 70% of the total value of your claim. Industry is given to the amount of your claim, who prepared it, and first time claims are financeable, 2ND time claims even better!
If your firm has SR&ED or Media Credits to finance seek external and speak to a trusted, credible and experienced Canadian company financing advisor. It’s all about cash flow, and eliminating the waiting!