Indie producers feel threatened over taxes

Film, TV group negotiating with Canada Revenue Agency

TORONTO -- Canadian indie producers fear they stand to lose millions of dollars if the Canada Revenue Agency pushes ahead with plans to tighten rules on indigenous film and TV tax credits.

Following recent random audits, local producers are complaining that Canada's tax man has imposed a 10% cap on producer fees that can be claimed as part of tax returns for individual film and TV projects.

"Until you get audited, you wouldn't know about it. How would I have known you have a different rule?" Donna Leon of Ottawa-based Genuine Pictures said after her company was stung.

The tax change departs from past practice, in which producers often recorded a claim for 15% or even 20% of their personal labor costs, against possible write-offs for corporate overheads.

The Canadian Film and Television Production Assn., which represents indie producers, offered no comment on the tax change while it negotiates with Canada Revenue Agency over the issue.

But producer reps in private insist producers will face smaller tax rebates than anticipated if the tax change comes into effect, with the biggest shortfall among recent faulty applications being CAN$400,000 ($334,000).

Canada Revenue Agency also had no comment. But a spokesman did say that the tax man "works closely with the affected stakeholders and is always exploring opportunities to improve the delivery of its programs and services."