Are you a video game developer and wondering if you should incorporate?
Well, here’s a video for you.
Generally for all businesses, the sweet spot to incorporate is when you are making more than you need, so that you can shelter the excess in a corporation at a much lower tax rate!
Now tax rates varies by provinces, but for example in BC highest personal tax rate is 53.5%, and for corps 11%, that’s 42.5% tax deferrals, until you pay yourself.
Plus of course your business can deduct business related expenses from your income, which lowers your income, and lowers, the tax bill.
Now for Video Game developers in Canada specifically there is an EXTRA incentive called the Interactive Digital Media Tax Credit. This tax credit varies across provinces, and is very generous, ranging from 17.5% to 44% of eligible expenses.
Now before you go ahead and incorporate, you want to make sure that you are not flagged as a Personal Service Business (I’ll put a link to video for more info), but basically, PSB are like incorporated employees. Your business is serving only 1 customer. This set up is frowned upon and CRA can see right through it. You are actually an employee and just incorporated for the tax benefits.
I hope you find t his video helpful, subscribe if you like the content.
Are you a video game developer and wondering if you should incorporate?
Well, here’s a video for you.
Generally for all businesses, the sweet spot to incorporate is when you are making more than you need, so that you can shelter the excess in a corporation at a much lower tax rate!
Now tax rates varies by provinces, but for example in BC highest personal tax rate is 53.5%, and for corps 11%, that’s 42.5% tax deferrals, until you pay yourself.
Plus of course your business can deduct business related expenses from your income, which lowers your income, and lowers, the tax bill.
Now for Video Game developers in Canada specifically there is an EXTRA incentive called the Interactive Digital Media Tax Credit. This tax credit varies across provinces, and is very generous, ranging from 17.5% to 44% of eligible expenses.
Now before you go ahead and incorporate, you want to make sure that you are not flagged as a Personal Service Business (I’ll put a link to video for more info), but basically, PSB are like incorporated employees. Your business is serving only 1 customer. This set up is frowned upon and CRA can see right through it. You are actually an employee and just incorporated for the tax benefits.
I hope you find t his video helpful, subscribe if you like the content.
Be sure to check out The Canada Digital Adoption Program (CDAP) offered by the Government of Canada to help small and medium-sized enterprises (SMEs) adopt digital technologies to increase their competitiveness. There are two components to the program
1. Grant: Eligible businesses will receive a grant to build their digital plan
2. Loan: Interest free loan up to $100K
To help our businesses recover from covid and continue bloom, our Government both federally and provincially have offered quite a few programs and this is one of them.
