One of the leading and thriving industries across Canada over the last five years is the video game industry. As shown during COVID, over 23 million Canadian gamers are actively enjoying offline and/or online gaming experiences. With the evolution of Twitch (live gamer platform) and Esports (live video game sports) taking off, numerous people are turning to videos games as an alternative to other forms of daily life. To meet this high demand in gamers, there are over 692 gaming studios across Canada. Companies such as Next Level Games, Radical Entertainment | Activision, Behaviour Interactive, and Bioware to name a few are leading the charge. Gaming companies are employing over 28,000 Canadians to develop, architect, mold, create and program the next big video game, many are unaware that all of this time and effort can lead to a large cash return.
The Scientific Research and Experimental Development (SR&ED) Tax Credit allows Canadian Controlled Private Corporations (CCPCs) a 35% Federal cash return on their expenditures or a 15% credit for Non-CCPC Corporations. Expenditures can include staff, materials consumed, and subcontractors in Canada. Within the gaming industry, this can be the development of AR or VR, backend algorithms, motion capture and simulation, and image processing and reconstruction.
It is irrelevant if you are a start-up, small-medium enterprise, or large corporation to be eligible for the SR&ED Tax Credit. Below we have illustrated how a small gaming company with four technical staff received over $100,000 from the Federal government and an additional $37,000 from the Ontario government.
Ontario SR&ED Calculation
Are you a CCPC?
Number of technical staff directly engaged with R&D
Average salary of technical staff directly engaged with R&D
Percentage of time spent in SR&ED
Materials consumed during R&D activities
Third-party payments such as to universities
Federal Tax Credit
Provincial Tax Credit
(Figures in the chart are a rough estimate. Please contact Braithwaite Canada for a detailed breakdown of your next SR&ED claim)
How can Braithwaite Canada assist with the gaming industry?
Braithwaite Canada takes a 7-step approach to maximize every R&D Tax Credit Claim filed to CRA (Detailed description of the 7-step approach).
For further information on how Braithwaite Canada can assist your company in successfully preparing an SR&ED Tax Credit claim to CRA, please contact us today.
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