Lucrative film tax credits are at the heart of two civil court cases filed this month in BC Supreme Court.
In the first, the German producer of 2005’s Just Friends is suing executors of the estate of the late William Vince, a Vancouver-based film producer, for allegedly pocketing $3 million in Saskatchewan film tax credits. The lawsuit also names as defendants Vancouver producer and Vince’s sister, Lyn Vince, and Vancouver-based Infinity Features Entertainment Inc.
Plaintiff Cinezeta Internationale Filmproduktionsgesellschaft MBH & Co. KG claims that it was lawfully owed the tax credits for Just Friends. It alleges that the defendants secretly applied for the tax credits and transferred them to a U.S. bank account and to an account belonging to Cavern Productions Ltd.
“All this was done in order to remove the $3 million beyond the grasp of ... Cinezeta,” the lawsuit claims.
In the second suit, Vancouver-based Score G Productions Inc. is suing Vernon-based accounting firm Meyers Norris Penny LLP and chartered accountant Ryan Mackiewich for losses that Score G claims to have suffered as a result of accounting advice.
The suit claims that Mackiewich advised the company to convert a loan into a shareholder’s loan as a means to protect the company’s federal film tax credits in an estate dispute.
It contends, however, that that move proved damaging to Score G. It claims that the company had not been told that it would have to repay the loan before it could apply for tax credits and that, in any event, it had to repay the loan within a year.
Score G was not informed of this deadline until after it passed, the suit claims.
Score G is seeking $44,576 in damages.
Robert Wong, vice-president of tax credits and development for BC Film + Media, said it’s rare that B.C. production companies end up in court over film tax credit woes. He said that, in general, B.C.’s film tax credit system is “pretty straightforward” – and that it mirrors most of the large film tax programs across the country.
Wong said the one thing that sometimes impedes producers from collecting tax credits is their timing.
“Either [producers are] just not aware of the program and they come to us too late or they forget; they say, ‘We’re going to do the tax credits’ but they don’t actually follow through.”
Trevor Hodgson, vice-president of business for longtime local production company Paperny Entertainment, concurred that most local producers are able to access tax credits.
“From what I understand, [local producers] can generally access them, it’s not much of a struggle,” he said.
Hodgson said that at Paperny, he heads off any tax credit surprises by making sure the company’s tax credit math is correct before it greenlights a show.
“The provincial agencies that run the tax credits are not there to figure out how to penalize you; they’re really there to help you,” he said. “So instead of hiding anything, I kind of show them all my cards and I say, ‘This is what I want to do, am I compliant or not ? And if I’m not, tell me, and I’ll make sure that I am.’” •
