Ontario Media Development Corporation, administered jointly with the Canada Revenue Agency.

The Ontario Book Publishing Tax Credit (OBPTC) is a refundable tax credit, based upon eligible Ontario pre-press, printing and marketing expenditures incurred by a qualifying corporation with respect to eligible book publishing activities.

• The OBPTC is calculated as 30% of the eligible Ontario expenditures, net of any government assistance related to these expenditures, incurred by a qualifying corporation with respect to eligible book publishing activities, up to a maximum tax credit of $30,000 per book title.
• Books published prior to May 3, 2000 are subject to a maximum credit of $10,000 per title.

The 2009 Ontario Budget proposes to expand eligibility to qualifying expenditures incurred after March 26, 2009 for:

• any number of books by a Canadian author in an eligible category of writing; and
• direct expenses that reasonably relate to publishing an electronic version of an eligible book.

The above budget proposals must be passed by the legislature and receive Royal Assent to become law.

What Categories of Writing Are Eligible

• Fiction is a book-length work of the imagination in prose including novels and book-length collections of short stories or novellas.
• Non-fiction is a work of prose based on factual information including history, travel, social issues and current events; or is an exposition of ideas including works of philosophy, social and art criticism, and political enquiry. Non-fiction educational texts, published for use in educational institutions, are eligible as long as they meet the other eligibility requirements. A book-length play or a radio or television drama published in book form will be considered under non-fiction.
• Poetry is a book-length work of imagination written in rhyme, blank verse, or another recognized poetic form, either as a book-length poem or a book-length collection of poems.
• Biography is a book-length work in prose based on fact, telling the story of one (or more) person's life (or lives) including an autobiography (the author's own story told as a factual account), or a memoir (a selective but factual retelling of events).
• Children's books are books designed for readers under 16 years of age. Children's books may be less than 48 pages and may be illustrated titles. Young adult titles, specifically designed for readers aged 9 to 18 will be considered children's books.
  Note that for books published after May 11, 2005 the category of "children's books" has been replaced by 4 new categories: children's fiction, children's non-fiction, children's poetry and children's biography.

What Types of Literary Works Are Eligible?
A literary work is an eligible literary work if it was published after May 6, 1997 and:

• it is written by an eligible Canadian author, or if it is written by more than one author, at least 90% of the material is written by eligible Canadian authors;
• 90% or more of the literary work is new material that has not been previously published;
• it belongs to an eligible category of writing;
• where it contains pictures, the ratio of the amount of text to pictures is at least 65 % (except in the case of children's books);
• it is at least 48 printed pages in length (except in the case of children's books) and is bound as a paperback, or a hardback; and
• it is not a prescribed ineligible publication.

Who Is an Eligible Author?
An eligible Canadian author of an eligible literary work is an individual who:

• is either a Canadian citizen or a permanent resident, and is ordinarily resident in Canada (at the time the contract is entered into to publish the literary work); and
• has not authored more than two literary works of the same eligible category of writing. (In the case of qualifying expenditures prior to May 3, 2000, an eligible author must not have authored a previously published literary work in an eligible category.)

Who Is Eligible?
A qualifying corporation is a Canadian-controlled corporation, as determined under sections 26 to 28 of the Investment Canada Act (Canada) that carries on a book publishing business primarily through a permanent establishment in Ontario and is not exempt from income tax. A qualifying corporation must allocate more than 50% of its taxable income to Ontario in the taxation year the credit is being claimed and must have published at least two books in the previous year. An exception is made regarding the requirement to have published two books in the previous year where an Ontario book publishing company has transferred its business, amalgamated or wound up its company.

What Kind of Expenditures Are Eligible?
Qualifying expenditures include 100% of pre-press costs and promotional costs and 50% of production costs paid by the book publishing company in respect of the publishing of an eligible literary work. These qualified expenditures are reduced by any government assistance received or expected to be received in respect of the literary work.

For taxation years ending before January 1st, 2009:
Application is made to the Ontario Media Development Corporation for a certificate of eligibility, which the applicant corporation files with the Ontario Ministry of Revenue (MOR) together with its tax return in order to claim the OBPTC. The Ontario Book Publishing Tax Credit Claim Form is available on the MOR website at: http://www.rev.gov.on.ca/english/forms/ct/pdf/0940a.pdf

For taxation years ending after December 31st, 2008:
Application is made to the Ontario Media Development Corporation for a certificate of eligibility, which the applicant corporation files with the Canada Revenue Agency (CRA) together with its tax return and Schedule 564 – Ontario Book Publishing Tax Credit, in order to claim the OBPTC.

Note:
This sheet is a general guide and may not be relied upon in order to determine eligibility for the amount of an anticipated tax credit. Please consult the Ontario Media Development Corporation for further details.

Cultural Development, Digital Media, Tax Credits

For questions regarding eligibility:
Tax Credits & Financing Programs
Ontario Media Development Corporation
175 Bloor Street E., Suite 501
South Tower
Toronto ON M4W 3R8
Tel: (416) 314-6858
Fax: (416) 314-6876
Email: taxcredits@omdc.on.ca
Website: http://www.omdc.on.ca/Page3397.aspx

For all other enquiries:
Canada Revenue Agency
Tel: 1-800-959-5525

January 2010/AW