Are kit rentals considered eligible labour expenditures for the film tax credit programs?
The BC film tax credit programs are calculated based on labour expenditures made to BC-based individuals. The kit rental charges are not direct labour expenditures as they are paid for the rental of the equipment or tools and not for the individual’s labour. Therefore, under the BC Act, these amounts are not eligible to be included in the calculations for eligible labour expenditures. However, if the kit rental is paid to an employee and is included as a taxable benefit to the employee on their T4 and the relevant source deductions have been taken, kit rentals will be allowed to be included as an eligible labour expenditure. CRA’s Application Policy FIS 2006-01 provides further information on the inclusion of taxable benefits as labour expenditures. If an individual is being paid as a contractor, the kit rentals are not permitted as eligible labour expenditures.
