Currently, under section 79 (1) “accredited qualified BC labour expenditure” of the Income Tax Act of British Columbia, an accredited production corporation claiming the Production Services Tax Credits (PSTC) must give notice (pre-certification) in accordance with section 84.1 to the certifying authority – Creative BC:
#1 – within 60 days after incurring the 1st accredited BC labour expenditure if it occurred on or after July 1, 2020 and prior to February 22, 2022;
#2 – within 120 days after incurring the 1st accredited BC labour expenditure if it occurred on or after February 22, 2022.
Proposed measures for PSTC applicants
As part of Budget 2023, legislative measures will be brought forward which will impact production companies that incurred their first accredited BC labour expenditure after June 30, 2020 and prior to February 22, 2022 (#1). The measures will allow these companies to claim labour expenditures incurred up to 120 days prior to the pre-certification submission date. Production companies will be able to claim accredited BC labour expenditures incurred in the 120 days prior to filing their pre-certification form regardless of how late they originally filed their pre-certification form. Examples of how this will impact companies can be found on the BC Government PSTC webpage.
If a production company has already been denied a portion of their PSTC claim by the Canada Revenue Agency (CRA) due to late pre-certification filing, the company can request an adjustment to its T2 corporate tax return. For more information, see Requesting a reassessment of your T2 return – Canada.ca
PSTC pre-certification requirements
Note that all productions that have incurred the 1st accredited BC labour expenditure on or after February 22, 2022 (#2) must submit a pre-certification form to Creative BC within 120 days after the 1st accredited BC labour expenditure is incurred. If a pre-certification form is not submitted within 120 days, production companies are unable to claim any labour expenditures incurred prior to the filing date of the pre-certification form. For more information, please visit BC government FAQ webpage and read our previous newsletter here.
Creative BC encourages corporations to submit a pre-certification registration form as soon as the 1st BC labour expenditure is solidified, to avoid a reduction of the estimated tax credits. Please contact us for any questions.
To find out more, visit:
- PSTC Creative BC Pre-Certification FAQs
- PSTC Government of BC
- PSTC Government of BC FAQS
- Part 5 of BC Income Tax Act