According to KPMG’s Competitive Analysis (2016), Halifax, Nova Scotia ranks in the top 10 cities worldwide, among recognized video game clusters, for having the lowest operating costs. With these competitve operating costs, coupled with a generous tax credit, Nova Scotia is the most competitive jurisdiction in Canada for establishing a video game production centre.
Digital Media Tax Credit
Nova Scotia offers a digital media tax credit - making this the ideal place for video game development and interactive media.
Qualifying companies can claim the lesser of 50% of the qualifying expenditures or 25% of total expenditures. Qualifying expenditures could include:
- 100% of eligible salaries in Nova Scotia
- 65% of third party labour remuneration
- up to $100,000 in marketing and distribution expenditures
Digital Animation Tax Credit
The Digital Animation Tax Credit is a refundable tax credit for costs directly related to the development of digital animation in Nova Scotia.
This tax credit provides an incentive of up to 60% on labour associated with the project, including a labour bonus of 17.5% on animation-specific activities. The labour bonus is in addition to the base credit available.
Research and Development Support Programs
Through Scientific Research & Experimental Development (SR&ED) Tax Credits and/or the Industrial Research Assistance Program (IRAP), many of the costs related to the development of new interactive media technology can be recovered. This makes Nova Scotia a great place to develop your video game engines as well as the games themselves!
Eligible expenses include wages and salaries of employees directly engaged in the eligible R&D work, overhead expenditures, and materials.
Canadian-controlled Private Corporations (CCPCs) are eligible for a combined credit rate of 44.75% (Nova Scotia Credit + Canada Credit)*
Foreign-controlled corporations are eligible for a combined credit rate of 27.75%(Nova Scotia Credit + Canada Credit)*
*In calculating the combined credit, the federal tax credit base is reduced by the provincial tax credit receivable.
- SMEs between 1-500 people are eligible
- Federal funding released April 1st every year
- $50k non-repayable grant with 80% of direct labour and 50% sub-contractors.