Intro to the Tax Credit for the Production of Multimedia Titles

The tax credit for the Production of Multimedia Titles has been in place since 1996 and was created to develop the multimedia sector in Quebec and make the province an attractive place to develop video games and interactive digital media applications. A variety of interactive media products can be considered eligible for this credit, with varying rates.

This credit is refundable and applies to the salaries of eligible employees or subcontractors for work done on eligible multimedia productions in Quebec. This work can include any stage of the production, with activities including initial design, writing, game development and user community management all being possibly eligible.

In this article, we will take a deep dive into Quebec’s Tax Credit for the Production of Multimedia Titles and go over the details of the funding as well as the specifics of the eligibility criteria.

Eligibility Criteria

First, this tax credit can only be claimed by businesses that meet specific criteria and that undertake eligible work. The work also needs to be done by eligible employees or subcontractors in Quebec. Therefore, several criteria must be met to claim the credit.

To be eligible for the Multimedia Tax Credit, companies must operate a corporation that has an establishment in Quebec and be the main producer of an eligible multimedia title. Only the producer of a title may claim the credit, so if a title is being developed in total or in part at the request of another corporation, Investissement Québec will not recognize the corporation as having produced the title.

A corporation that produces a portion of the eligible multimedia title on behalf of the main producer of the title can also claim the tax credit on the portion that they worked on, but only if the main producer of the title does not have an establishment in Quebec.

Eligible labour expenses related to production work can often be claimed in full – excluding any other source of government or non-governmental funding covering the same expenses – for salaried employees and subcontractors not at arm’s length. Eligible production work done by a subcontractor at arm’s length can be claimed at 50% of its total cost. In all these cases, the employee or subcontractor has to be based in Quebec for the tax credit to apply.

Eligible production work includes all activities necessary to design and produce the title, from the beginning of the design stage and continuing indefinitely, including after the title is initially commercialized. This includes principal development of the title’s interactive structure, architecture and programming, the core design of the title’s interactivity loops, and the production of the title’s content – art, text, scenario, sound design, music and more.

Activities necessary for further development and improvement of the title after it has been commercialized are also eligible. This can include developing and maintaining a community of users who can provide feedback on issues, additions to a title post-commercialization and the analysis of quantitative data to optimize the title.

Project Eligibility

Corporations can claim the Multimedia tax credit if they produce an eligible interactive digital media title in Quebec and intended for commercial release. Titles that are produced for internal use are not eligible, they must be available for sale. Interactive digital media titles can include video games, educational software, professional simulators, and more.

To be eligible, projects must include at least 3 of the following 4 media: text, sound, fixed images and animated images.

One important thing to keep in mind is that interactivity must be integral to the product’s functionality. Most – if not all – of the interactive elements should be contained within the electronic medium.

Investissement Québec specifies that the types of media – text, sound, fixed images and animated images – must be present in “appreciable quantity”, and they must all be an integral part of the functionality of the game, mobile app or another type of multimedia title. The loss of one of the elements should fundamentally affect the functionality of the software.

In addition to the basic eligibility criteria – the title must contain at least 3 of 4 types of media – the title must meet Investissement Québec’s criteria of interactivity within the electronic medium. This is evaluated with 3 main criteria: feedback, control, and adaptation.

Feedback is measured by the response given to the user – or player – of the title whenever an action is taken. This could be an audiovisual cue that an action has been completed, or a text-based comment on the quality of an answer given by the user for a puzzle, or other ways the title indicates a user’s performance in a level and suggestions on how to improve, for example.

Control is measured by the degree of influence the user can have on the electronic medium and its content. Examples of control include moving a character around, making choices between options provided by a game, or implementing a strategy to achieve a goal.

Adaptation is measured by the degree of variability of the actions available to the user of the title depending on specific situations. The presence of specific events that can only be engaged according to a user’s skill level or the skills they selected on a decision tree as they progressed through a game can satisfy this criterion.

Investissement Québec also evaluates the scenario of the title: what reason is the title giving the user to interact with it? This criterion can be met by having a series of objectives or a storyline.

All these elements work together and drive the criteria behind “interactivity” between the player and the multimedia title. While they are used in a broad sense to determine whether any digital media title or application available electronically is eligible as a “multimedia title,” in practice the tax credit is principally intended for video game production activities.

Tax Credit Rates

This refundable tax credit can fund up to 37.5% of eligible labour expenditures. However, different maximum amounts and percentages will apply depending on specific circumstances. The main factors that affect the tax credit rate and funding amounts of this program are the language in which the interactive title is released, the nature of the title – is it entertainment or educational? – and who conducted the eligible development work.

In the vast majority of cases, the base tax credit is 30% of eligible labour expenditures on an eligible multimedia title according to the criteria discussed above. Claimants can also receive a bonus 7.5% tax credit on a commercialized title if a French-language version is available at the time of its release. It is important to note that a corporation could not launch a title exclusively in English – or any other language – and then add French text or audio after it is released and claim the full 37.5%. Because the title was not available in French at the time of its release, the company could only claim up to 30% of labour expenditures in this case.

It is important to note that a lower tax credit rate of up to 26.25% applies to titles in any language that are intended for professional training purposes only.

Maximum Funding Amounts

Once we know the company’s overall tax credit rate for the project – 37.5%, 30% or 26.25% depending on the title – it is applied to the eligible labour expenses to calculate the actual amount the company can receive claiming the credit.

Three scenarios can apply depending on who conducted the eligible development work.

First, as mentioned earlier, production work done by a subcontractor at arm’s length can be claimed at 50% of its total cost. The maximum refundable tax credit amount, therefore, corresponds to 37.5% of half of the contract value in this case.

When the work is done by an employee or a subcontractor not dealing at arm’s length with the company claiming the credit, the eligible labour expenses are usually capped at $100,000 per employee or subcontractor per year. If an employee’s salary or subcontractor’s fee is lower than $100,000, the entire salary is therefore eligible. This means a maximum possible refund amount of $37,500 per employee in most cases.

That said, there are some exceptions. This is because, for employees and non-arm’s length subcontractors, the program allows companies to exceed the $100,000 of salary expenses per year for a certain number of eligible individuals. The entire salary of even the highest-paid employees can then be considered an eligible expense, even if it is well over $100,000 a year, making the potential refund per employee more than $37,500.

The number of employees who can have more than the first $100,000 of their annual salary be considered an eligible expense is determined by multiplying the total numbers of employees and non-arm’s length subcontractors for which the company is claiming the credit by 20% and rounding the number.

Application Process

While it is granted by Revenu Québec to incentivize companies to develop video games and interactive media products in Quebec, it is important to note that much of the application process for this credit first goes through Investissement Québec, not RQ itself.

The application process for this tax credit is divided into two parts. Companies must first obtain a certificate of eligibility to assess the eligibility of the title itself, followed by an attestation of production work, where IQ will certify the number of eligible hours worked by the corporation on the title. Both are issued by Investissement Québec. The first certificate confirms that the multimedia title qualifies for the credit and only needs to be obtained once, while the production work attestation has to be renewed for every taxation year in which the corporation claims the credit.


How R&D Partners can help  

Still have questions about this tax credit? Contact Dominik Klein at


Additional Resources:

Investissement Québec program page:

Detailed program factsheet: