Note: The Province previously introduced a legislative amendment to the Ontario Book Publishing Tax Credit to temporarily waive the requirement that a book be published in a bound edition of at least 500 copies for books published in 2020 and 2021. In the 2022 Budget, the Province introduced a legislative amendment to permanently remove this requirement for subsequent years. This legislative amendment passed into law on September 8, 2022. The requirement that a book be published in a bound edition of at least 500 copies still applies to books published in years before 2020.
What Is It?
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, as well as expenses related to publishing an electronic or digital version of an eligible literary work.
How Much Is the Tax Credit?
The OBPTC is calculated as 30% of the eligible Ontario 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.
Who Is Eligible?
A qualifying corporation is a Canadian-controlled corporation, as determined under sections 26 to 28 of the Investment Canada Act (Canada), must carry on a book publishing business primarily through a permanent establishment in Ontario and files an Ontario corporate tax return. 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.
A literary work is an eligible literary work if:
- 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 suitable for publication as a bound paperback, or a hardback*; and
- it is not a prescribed ineligible publication.
*Note that a bound edition is only required for books published prior to 2020.
Who Is an Eligible Author?
- An eligible Canadian author is an individual who, when the contract is entered into to publish the eligible literary work, is ordinarily resident in Canada and is either a Canadian citizen or a permanent resident.
What Categories of Writing Are Eligible?
The eligible categories of writing are: fiction, non-fiction, poetry, biography, children’s fiction, children’s non-fiction, children’s poetry and children’s biography.
- 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, 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.
What Kind of Expenditures Are Eligible?
- Qualifying expenditures include 100% of the costs of preparing a literary work for publication in print and digital or electronic formats, and 50% of the production costs with respect to publishing a printed version of a book, as well as the costs relating to transferring a prepared digital or electronic version of a literary work into a form suitable for distribution.
How Is the Credit Administered?
The OBPTC is jointly administered by Ontario Creates - an agency of the Government of Ontario - and the Canada Revenue Agency. Application is made to the Ontario Creates for a Certificate of Eligibility, which the book publishing company files with the Canada Revenue Agency together with its tax return in order to claim the OBPTC. The amount of the credit, net of any federal and Ontario taxes owing, will be paid to the qualifying corporation. If the qualifying corporation does not owe any taxes, the full amount will be paid out.
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*PLEASE NOTE: CANADA REVENUE AGENCY (CRA) ADMINISTERS BOTH FEDERAL AND ONTARIO CORPORATE TAXES. THE CRA IS THE FIRST POINT OF CONTACT FOR ALL CORPORATE TAX ENQUIRIES (1 800 959-5525).
Note: This sheet is a general guide and may not be relied upon in order to determine eligibility for the amount of an anticipated credit. Please consult the OBPTC legislation and regulation for further details.
As of November 2021
OBPTC COVID FAQS
Please see information on CRA’s website.
1. Are costs for medical and/or health and safety personnel required due to COVID-19 eligible costs for tax credits? What about expenses related to testing for COVID-19 and extra cleaning and sanitation costs?
2. Are costs for personal protective equipment (PPE) required due to COVID-19 eligible costs for tax credits?
3. Are suspension, severance or relief payments eligible expenditures for tax credits? What about retention payments to induce an individual to remain with the literary work while it is stalled?
4. Will deposits or advances paid to vendors be eligible costs for tax credits where those amounts have been forfeited due to COVID-19?
5. Is CEWS considered assistance for purposes of the Ontario tax credits?
6. Publication of my literary work has stalled because of COVID-19 and it will never be published. Can I still claim the OBPTC on the expenditures my company incurred before we were shut down?
7. My literary work has been published but my company had to make changes due to COVID-19 so we weren’t able to meet all of the tax credit eligibility requirements. Have any eligibility requirements been waived due to COVID-19?
FAQs as of January 2023
This version of the FAQs has been updated to provide additional information regarding the legislative amendment to permanently remove the requirement that a book be published in a bound edition of at least 500 copies for books published in a year after 2019 (see #4); to provide some clarifications (see #2 and #5); and to provide information about appeals (see #10 and #11).
Numbering has changed.
Frequently Asked Questions
How much of the literary work must be new material to be eligible for the OBPTC?
At least 90 per cent of the literary work must be new material that has not been previously published (in book form).
Can more than one version of a literary work be eligible for the OBPTC?
More than one version of a literary work (i.e. hardcover and / or paperback, as well as its digital version) may be eligible for the OBPTC, so long as the eligible versions were published by the same publisher (and meet all the other eligibility criteria).
Is a translation considered as an eligible literary work for the OBPTC?
A translation of a previously published literary work is not an eligible publication for the OBPTC.
Is there a minimum number of printed copies required for a literary work to be eligible for the OBPTC?
Literary works published in years before 2020 must be published in an edition of at least 500 copies of a bound book to be eligible for the OBPTC. There is no such requirement for books published in a year after 2019.
What is considered as “government assistance” for the OBPTC (and would therefore grind the tax credit)?
Government assistance means assistance from a government, municipality, or other public authority in any form, including a grant, subsidy, forgivable loan, and deduction from tax and investment allowance, but does not include a tax credit, or a grant that is not specific to a particular eligible literary work. For example, amounts received from the Department of Canadian Heritage’s Canada Book Fund, as well as Block Grants or core or operational funding from the Canada Council for the Arts and the Ontario Arts Council, would not be considered government assistance, as none of these are title-specific.
Will Canada Revenue Agency (CRA) process incomplete corporate tax return filings?
The CRA will not process a claim until it is ‘complete’. A claim is considered ‘complete’ when all of the following documentation are filed with the CRA: a T2 Corporation Income Tax return; a completed Schedule 564 (T2SCH564) for each literary work; and an Ontario Creates certificate of eligibility (or copy) for each literary work. A copy of the certificate of eligibility and a completed T2SCH564 must be included with the T2 Corporation Income Tax return for each year a claim is made in respect of each literary work.
What is the best way to send the certificates of eligibility to CRA?
Applicants are encouraged to upload their certificates via the “T2 attach-a-doc” feature of their CRA-approved tax software. This is a feature that allows taxpayers to electronically file supporting documentation with the CRA directly at the time of filing their T2 tax return (note that documents can also be filed via this feature within 24 hours after filing the T2 tax return electronically). If the document is filed later (i.e., after 24 hours from the time of filing the T2 tax return electronically), you can register for My Business Account (MyBA) and then submit it electronically via the MyBA portal. A new feature is now available on MyBA that allows registrants to submit their certificates and other documents without a case or reference number. Please see What’s new – Film and media tax credits on CRA’s website for further details.
If you choose to submit the certificate by mail, it should be sent to the appropriate CRA tax centre. You can also submit the certificate by fax and it will be converted to electronic format when received at the CRA. Please see Film services units - Canada.ca for the mailing addresses and fax numbers.
What is the tax credit administration fee?
The OBPTC administration fee is calculated as 0.15% of eligible expenditures for the application. There is a minimum fee of $50 per application and maximum fee of $200 per application.
There is an additional filing fee of $100 applied to applications for Certificates of Eligibility received more than 24 months after the first year-end of the claim. As well, there is a fee of $100 for each Amended Certificate.
Who should I contact in the Tax Credits Department with other questions?
If you have further questions, please contact the phone duty line by email email@example.com or call us at 416 642-6659. Please leave a detailed message including your name, company, phone number and the tax credit or file about which you are inquiring. There is a different person on phone duty every day, and he/she will respond to your email or call within one business day.
What can I do if my product/production is found to be ineligible?
If an issue of ineligibility arises during review, the Business Officer will communicate with the Applicant to explain the issue, ask further questions and request additional documentation if required. The Applicant will be given the opportunity to provide additional information or documentation to support their position for any issue in dispute.
After considering any additional information or documentation and consulting with the Ontario Creates Director of Tax Credits, if the issue remains unresolved, Ontario Creates may recommend the Applicant withdraw the product(s)/production(s) from review. If the product(s)/productions(s) are not withdrawn, Ontario Creates will issue a Letter of Ineligibility for those product(s)/production(s).
If a Letter of Ineligibility has been issued for a product or production, the Applicant cannot resubmit that product or production for a tax credit. CRA is notified of any Letters of Ineligibility issued by Ontario Creates.
Determinations of ineligibility are not subject to the Ministry of Finance or Canada Revenue Agency objections and appeal process. Applicants can commence an application for judicial review of an Ontario Creates’ decision on eligibility.
Can I appeal the amount of the tax credit received?
If you have received a Certificate of Eligibility but wish to appeal the amount of the tax credit determined by the CRA, please refer to the CRA’s objections and appeals process at : https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/ontario-corporations-tax.html
Note that determinations of ineligibility are not subject to the Ministry of Finance or Canada Revenue Agency objections and appeal process.