Interactive Digital Media Tax Credit

Program Description

British Columbia's Interactive Digital Media Tax Credit is a refundable 25% credit on eligible BC-resident salaries and wages for taxable Canadian corporations with a BC permanent establishment developing interactive digital media products — BC's own examples are video games, educational software, edutainment products and simulators. The rate was permanently increased from 17.5% effective September 1, 2025. A corporation qualifies with eligible BC wages of at least $2,000,000, or with $100,000 to $2,000,000 if its principal business is IDM development (or it provides substantially all of its services to such a corporation). Registration through eTaxBC is required for each tax year and can be filed during or after the year, as long as the credit is claimed with CRA within 18 months of fiscal year end.

Eligibility Requirements

• Taxable Canadian corporation throughout the tax year (sole proprietors, partnerships and individuals cannot claim)
• Permanent establishment in British Columbia
• Developing interactive digital media products in British Columbia — BC's examples are video games, educational software, edutainment products and simulators; AR and VR products qualify only where they meet the IDM product requirements, assessed product by product
• Eligible BC salary and wages of at least $2,000,000 in the tax year, OR between $100,000 and $2,000,000 with either: the corporation's principal business is developing IDM products, or all or substantially all of its business consists of providing eligible activities to a corporation that has a BC permanent establishment and whose principal business is IDM development or whose eligible salary and wages are at least $2,000,000
• Register through eTaxBC for each tax year — registration may be filed during or after the tax year, provided there is time to claim the credit with CRA within 18 months of fiscal year end
• Products are interactive (passive streaming video, blogs, online magazines, slideshows and social media products are ineligible)
• Application fee paid to BC ($1,000–$5,000 per year depending on employee count)
• Must not claim the BC SR&ED tax credit for the same tax year — the two are mutually exclusive
• Must not be a labour-sponsored venture capital corporation, a corporation with a registered employee share ownership plan, a registered employee venture capital corporation, or a registered small business venture capital corporation — or be controlled, directly or indirectly, by one
• Must not carry on a personal services business