43.11 (1) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43 and 43.2 to 43.10 for the taxation year, an amount not exceeding the amount of its Ontario interactive digital media tax credit for the taxation year.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Same (2) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV of the Act an amount not exceeding the amount by which its Ontario interactive digital media tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1).  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Amount of tax credit (3) The amount of a qualifying corporation’s Ontario interactive digital media tax credit for a taxation year is the sum of, (a) 20 per cent of the amount of the corporation’s qualifying expenditure for the taxation year; (b) if the corporation is a qualifying small corporation, the sum of, (i) 10 per cent of the amount that would be determined under subclause (4) (b) (i) for the taxation year if the amounts referred to in that subclause were determined by reference only to expenditures incurred after March 23, 2006 and before January 1, 2009, and (ii) 5 per cent of the amount that would be determined under clause (4) (a) for the taxation year if the amounts referred to in that clause were determined by reference only to expenditures incurred after March 25, 2008 and before January 1, 2009; and (c) if the corporation is not a qualifying small corporation, 5 per cent of the amount that would be determined under subsection (4) if the amounts referred to in that subsection were determined by reference only to expenditures incurred after March 25, 2008 and before January 1, 2009.  2006, c. 33, Sched. G, s. 2 (1); 2008, c. 7, Sched. E, s. 7 (1). Qualifying expenditure (4) The qualifying expenditure of a qualifying corporation for a taxation year is the sum of, (a) the amount, if any, that would be its eligible labour expenditure for the taxation year in respect of eligible products that are specified products if that amount were determined by reference only to expenditures incurred after March 23, 2006 and before January 1, 2009; and (b) the amount, if any, of, (i) its eligible labour expenditure and eligible marketing and distribution expenditure for the taxation year in respect of eligible products, other than specified products, if the corporation is a qualifying small corporation for the taxation year, or (ii) the amount that would be its eligible labour expenditure and the amount that would be its eligible marketing and distribution expenditure for the taxation year in respect of eligible products, other than specified products, if those amounts were determined by reference only to expenditures incurred after March 23, 2006 and before January 1, 2009, if the corporation is not a qualifying small corporation for the taxation year.  2006, c. 33, Sched. G, s. 2 (1); 2008, c. 7, Sched. E, s. 7 (2, 3). Who claims amount in respect of specified product (4.1) For the purposes of subsection (4), if a qualifying corporation develops a specified product under a contract entered into after March 23, 2006, only the qualifying corporation is entitled to claim an amount under this section in respect of the specified product.  2006, c. 33, Sched. G, s. 2 (1). Eligible labour expenditure (5) A qualifying corporation’s eligible labour expenditure for an eligible product for a taxation year is equal to the amount, if any, by which the sum of “A” and “B” exceeds “E” where, “A” is the Ontario labour expenditure, if any, incurred by the qualifying corporation in the taxation year for the eligible product, “B” is the amount, if any, by which “C” exceeds “D” where, “C” is the total of all amounts, if any, each of which is the Ontario labour expenditure incurred for the eligible product by the qualifying corporation in a previous taxation year or by a qualifying predecessor corporation before the disposition, merger or wind-up, as the case may be, to the extent that, (a) if development of the eligible product is completed before March 26, 2008, the expenditure is incurred in the 25-month period ending at the end of the month in which development of the eligible product is completed, or (b) if development of the eligible product is completed after March 25, 2008, the expenditure is incurred in the 37-month period ending at the end of the month in which development of the eligible product is completed, and “D” is the total of all amounts, if any, each of which is the eligible labour expenditure for the eligible product that was included in the determination of the amount of a tax credit claimed under this section for a previous taxation year by the qualifying corporation or by a qualifying predecessor corporation, and “E” is the total of all government assistance, if any, in respect of the Ontario labour expenditure for the eligible product that, at the time the qualifying corporation’s return is required to be delivered under subsection 75 (1) for the taxation year, the qualifying corporation or any other person or partnership has received, is entitled to receive or can reasonably be expected to receive, to the extent that the government assistance has not been repaid pursuant to a legal obligation to do so.  2002, c. 22, s. 47 (1); 2004, c. 16, s. 2 (2); 2006, c. 33, Sched. G, s. 2 (2); 2008, c. 7, Sched. E, s. 7 (4). Eligible marketing and distribution expenditure (5.1) The eligible marketing and distribution expenditure of a qualifying corporation for an eligible product for a taxation year is the amount that is the lesser of “A” and “B” where, “A” is the amount, if any, by which $100,000 exceeds the total of all amounts, if any, each of which is the corporation’s eligible marketing and distribution expenditure for the eligible product or a qualifying predecessor corporation’s eligible marketing and distribution expenditure incurred for the eligible product prior to the disposal, merger or wind-up, as the case may be, that was included in the determination of the corporation’s tax credit under this section for a prior taxation year, and “B” is the amount calculated under subsection (5.2).  2000, c. 42, s. 19 (3); 2002, c. 22, s. 47 (2); 2004, c. 16, s. 2 (2). Same (5.2) The variable “B” in subsection (5.1) is the amount calculated using the formula, C – (D + E + F) in which, “C” is the total of all amounts, if any, each of which is a marketing and distribution expenditure in respect of the eligible product incurred by the qualifying corporation in the taxation year or in a previous taxation year or by a qualifying predecessor corporation before the disposition, merger or wind-up, as the case may be, to the extent that it was incurred, (a) in the month in which development of the eligible product is completed, and (b) in the period of 24 months before, or in the period of 12 months after, the month in which development of the eligible product is completed, “D” is the total amount of all government assistance, if any, for the marketing and distribution expenditures described in the definition of “C” for the eligible product that, when the qualifying corporation’s return is required to be delivered under subsection 75 (1) for the taxation year, the qualifying corporation or any other person or partnership has received, is entitled to receive or can reasonably expect to receive, to the extent that the government assistance has not been repaid pursuant to a legal obligation to do so, “E” is the total of all amounts, if any, each of which is an eligible marketing and distribution expenditure for the eligible product that was included in the determination of a tax credit claimed under this section for a previous taxation year by the qualifying corporation or by a qualifying predecessor corporation, and “F” is the total of all marketing and distribution expenditures described in the definition of “C” for the eligible product that are Ontario labour expenditures of the qualifying corporation or a qualifying predecessor corporation. 2000, c. 42, s. 19 (3); 2002, c. 22, s. 47 (3); 2004, c. 16, s. 2 (2); 2006, c. 33, Sched. G, s. 2 (3, 4). Application for certificate (6) In order to be eligible to deduct or claim an amount in respect of an Ontario interactive digital media tax credit under this section for a taxation year, a qualifying corporation shall apply to the Ontario Media Development Corporation or a person designated by the Minister of Culture for certification of its eligible products for the purposes of this section.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2); 2005, c. 31, Sched. 5, s. 8 (1). Same (7) A qualifying corporation that applies for certification shall provide the information specified for the purposes of this section by the Ontario Media Development Corporation or a person designated by the Minister of Culture to the person who specified that it be provided.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2); 2005, c. 31, Sched. 5, s. 8 (2). Certificate (8) If a qualifying corporation provides the information in accordance with subsection (7) in respect of its eligible products for a taxation year, the Ontario Media Development Corporation or a person designated by the Minister of Culture shall issue a certificate, and any amended certificates it considers appropriate, to the qualifying corporation with respect to its eligible products for the taxation year, certifying in respect of each eligible product, (a) that the product is an eligible product for the purposes of this section; and (b) the estimated amount of the corporation’s tax credit under this section applicable to the product.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2); 2005, c. 31, Sched. 5, s. 8 (3). Certificate to be delivered with return (9) In order to deduct or claim an amount under this section for a taxation year, a qualifying corporation must deliver to the Minister with its return for the taxation year the certificate for the taxation year that is most recently issued under subsection (8), or a certified copy of the certificate.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Deemed tax payment (10) A qualifying corporation shall be deemed to pay on account of its tax payable under this Act for a taxation year an amount claimed by the corporation not exceeding the amount, if any, by which “A” exceeds “B”, where, “A” is its Ontario interactive digital media tax credit for the taxation year, and “B” is the maximum amount, if any, deductible by the corporation under subsections (1) and (2) in determining its tax payable under this Act for the taxation year.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Time of deemed payment (11) A qualifying corporation shall be deemed to make the payment referred to in subsection (10) and the Minister shall be deemed to apply the deemed payment on the day on or before which the corporation would be required under clause 78 (2) (b) to pay any balance of tax payable for the taxation year.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Revocation of certificate (12) A certificate or amended certificate issued under subsection (8) may be revoked, (a) if an omission or incorrect statement was made and it is reasonable to believe that, if the omitted information had been disclosed or if the person issuing the certificate had known that the statement was incorrect, he or she would not have issued the certificate; (b) if none of the products in respect of which the certificate is issued is an eligible product; (c) if the corporation to which the certificate is issued is not a qualifying corporation; or (d) if, in determining the amount of its tax credit under this section for a taxation year, the corporation claims another corporation as a qualifying predecessor corporation in respect of an eligible product and the other corporation is not a qualifying predecessor corporation of the corporation before the eligible product becomes the property of, or is disposed of to, the corporation.  1998, c. 34, s. 42; 2002, c. 22, s. 47 (4); 2004, c. 16, s. 2 (2). Same (13) A certificate that is revoked shall be deemed never to have been issued.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Application (14) This section applies with respect to expenditures incurred after June 30, 1998 that are included in the Ontario labour expenditure for an eligible product.  1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Same, expenditures after May 2, 2000 (14.1) This section, as it is deemed to have read on May 3, 2000, applies with respect to expenditures incurred after May 2, 2000 that are included in the eligible marketing and distribution expenditure of a qualifying corporation for an eligible product and with respect to expenditures incurred after June 30, 1998 that are included in the Ontario labour expenditure of a qualifying corporation for an eligible product.  2000, c. 42, s. 19 (3); 2002, c. 22, s. 47 (5); 2004, c. 16, s. 2 (2). Definitions (15) In this section, “eligible product” means, in respect of a qualifying corporation, a product, (a) that satisfies the conditions prescribed by the regulations or that is a specified  product, and (b) for which public financial support would not be contrary to public policy in the opinion of the Ontario Media Development Corporation or, if another person is designated under subsection (6), in the opinion of that person; (“produit admissible”) “government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but not including a tax credit under this section; (“aide gouvernementale”) “marketing and distribution expenditure” means the amount determined under the rules prescribed by the regulations; (“dépense de commercialisation et de distribution”) “Ontario labour expenditure” means the amount determined under the rules prescribed by the regulations; (“dépense de main-d’oeuvre en Ontario”) “qualifying corporation” means a Canadian corporation, (a) that satisfies one of the conditions set out in subsection (16), (b) that is not controlled directly or indirectly in any manner by one or more corporations all or part of whose taxable income is exempt from tax under this Part or Part I of the Income Tax Act (Canada), and (c) that is not a prescribed labour-sponsored venture capital corporation under the regulations made under the Income Tax Act (Canada); (“société admissible”) “qualifying predecessor corporation” means, in respect of a qualifying corporation (the “transferee”), a corporation that was a qualifying corporation in respect of an eligible product and that, (a) disposes of the eligible product to the transferee in accordance with subsection 85 (1) of the Income Tax Act
(Canada) if, at the time of the disposition, (i) the corporation owns all of the issued and outstanding shares of the transferee, (ii) the transferee owns all of the issued and outstanding shares of the corporation, or (iii) all of the issued and outstanding shares of the corporation and the transferee are directly or indirectly owned by the same person, (b) merges with one or more corporations in accordance with section 87 of the Income Tax Act (Canada) to form the transferee, or (c) is wound up in accordance with subsection 88 (1) of the Income Tax Act (Canada); (“société remplacée admissible”) “qualifying small corporation” means, subject to subsection (18), a qualifying corporation to which subsection 57.2 (1) would not apply for the immediately preceding taxation year, (a) if the references to $5 million in clause 57.2 (1) (a) and in subclause 57.2 (1) (c) (i) were read as $10 million, and (b) if the references to $10 million in clause 57.2 (1) (b) and in subclause 57.2 (1) (c) (ii) were read as $20 million. (“petite société admissible”)  1998, c. 34, s. 42; 2000, c. 42, s. 19 (4); 2002, c. 22, s. 47 (6, 7); 2004, c. 16, s. 2 (2); 2005, c. 31, Sched. 5, s. 8 (4); 2006, c. 33, Sched. G, s. 2 (5-7). Specified product (15.1) A product developed by a qualifying corporation is a specified product for the purposes of this section if the following conditions are satisfied: 1. The product satisfies the conditions prescribed by the regulations. 2. The product is developed by the qualifying corporation under the terms of an agreement between the qualifying corporation and a purchaser that is a corporation that deals at arm’s length with the qualifying corporation. 3. The product is developed under the agreement for the purpose of sale or license by the purchaser to one or more persons, each of whom deals at arm’s length with the purchaser. 4. All or substantially all of the product is developed in Ontario by the qualifying corporation. 5. The development of the product is completed by the qualifying corporation after March 23, 2006.  2006, c. 33, Sched. G, s. 2 (8). Conditions for qualifying corporations (16) The following are the conditions referred to in clause (a) of the definition of “qualifying corporation” in subsection (15): 1. The corporation commences development of an eligible product at a permanent establishment in Ontario operated by the corporation, but does not complete development of the product before it is transferred to or otherwise becomes the property of another corporation in circumstances described in clause (a), (b) or (c) of the definition of “qualifying predecessor corporation” in subsection (15). 2. The corporation completes, at a permanent establishment in Ontario operated by the corporation, the development of an eligible product received from a qualifying predecessor corporation. 3. The corporation develops an eligible product at a permanent establishment in Ontario operated by the corporation.  2002, c. 22, s. 47 (8); 2004, c. 16, s. 2 (2). Ceasing to be a qualifying corporation (17) Despite paragraph 1 of subsection (16), a qualifying predecessor corporation ceases to be a qualifying corporation with respect to an eligible product immediately after the eligible product becomes the property of, or has been disposed of to, the other corporation.  2002, c. 22, s. 47 (8); 2004, c. 16, s. 2 (2). Amalgamations (18) Despite the definition of “qualifying small corporation” in subsection (15), a corporation formed as a result of an amalgamation of two or more predecessor corporations is not a qualifying small corporation for the taxation year commencing at the time of the amalgamation unless each predecessor corporation would be considered, but for this subsection, to be a qualifying small corporation for its last taxation year ending immediately before the amalgamation and, for the purposes of this subsection, each predecessor corporation is deemed to have been associated with every other predecessor corporation during the taxation year ending immediately before the amalgamation.  2006, c. 33, Sched. G, s. 2 (9). Section Amendments with date in force (d/m/y) 1998, c. 34, s. 42 - 01/07/1998 2000, c. 42, s. 19 (1-4)
- 03/05/2000 2002, c. 22, s. 47 (1, 4, 6-8) - 01/07/1998; 2002, c. 22, s. 47 (2, 3) - 03/05/2000; 2002, c. 22, s. 47 (5)
- 02/05/2000 2004, c. 16, s. 2 (2)
- 01/01/2004 2005, c. 31, Sched. 5, s. 8 (1-4) - 15/12/2005 2006, c. 33, Sched. G, s. 2 (1-9) - 24/03/2006 2008, c. 7, Sched. E, s. 7 (1-4) - 26/03/2008