Atlantic Canada Business Grants

Tax Credit

Nova Scotia Capital Investment Tax Credit (CITC)

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Amount:

$ 30,000,000.00

Type of Program:

Tax Credit

Description:

The Nova Scotia Capital Investment Tax Credit (CITC) is a 15% refundable corporate income tax credit claimed by eligible corporations for capital equipment acquired for use in Nova Scotia on or after January 1, 2015. The capital equipment must be acquired as part of an "approved project".

The CITC is aligned, but not harmonized with, the federal government’s Atlantic Investment Tax Credit (AITC). 

Comments on Funding:

Funding is 15% of the capital cost of "qualified property" acquired in a taxation year, with a maximum tax credit of $30 million per "approved project."

When It Ends:

Ongoing

Deadline:

Rolling Deadline

Eligibility:

The applicant must:

  • be a taxable Canadian corporation,
  • have a permanent establishment in Nova Scotia,
  • with certain exceptions, be corporations in the manufacturing, processing, fishing, farming, logging, storing grain and harvesting peat sectors,
  • have acquired capital equipment as part of an "approved project".

Application Steps:

1

Applicant must submit a mandatory Part A application and receive an "eligibility certificate" before an application for the tax credit can be made.

2

Applicant must submit a Part B application for a tax credit certificate once he obtained the eligibility certificate and no later than 18 months following the end of the taxation year in which the qualified property was acquired. Multiple Part B application for tax credit certificates can be made since projects can run over a period of up to 5 years.

Documentation Needed: 

The applicant must submit the following documentation in support of his Part A application form:

  • proof that the corporation is an "eligible corporation" and that its corporate registration is in good standing,
  • financial statements (projected financial statements for taxation years during project period and financial statements for the preceding taxation year),
  • a business plan for the project,
  • the T2 corporate tax return and notice of assessment if the project is underway and qualified property has already been acquired,
  • the loan agreements for all loans provided by public authorities,
  • any additional information deemed necessary by the Minister.

The applicant must submit the following documentation in support of his Part B application form:

  • proof of the capital cost of each qualified property,
  • a statement identifying the qualified property that was acquired in respect of and that matches the business plan submitted in support of the eligibility certificate,
  • a statement detailing any government assistance with respect to the qualified property,
  • a status report of the project and explanation for any deviation from the business plan submitted in support of the eligibility certificate,
  • the T2 corporate tax return and notice of assessment for the taxation year immediately preceding the taxation year for which a tax credit certificate is sought,
  • a draft copy of the corporation's Schedule 31 for the T2 corporate return in the taxation year for which the tax credit is being applied for,
  • a copy of the corporation's CITC eligibility certificate,
  • any additional information deemed necessary by the Minister.

Other Things to Note:

New Guidelines were published in March 2022.

Program Contact:

Capital Investment Tax Credit - Nova Scotia Department of Finance

CITC Guidelines.pdf

Nova Scotia Innovation Equity Tax Credit

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Amount:

$ 112,500

Type of Program:

Tax Credit

Description:

The Innovation Equity Tax Credit (Innovation ETC) is a non-refundable personal and corporate income tax credit available to eligible investors who invest in an approved corporation. The credit is meant to encourage investors to make equity capital investments in eligible Nova Scotia small and medium corporations engaged in innovative activities.

Comments on Funding:

The credit is equal to 35% of eligible investments made in approved corporations, up to $ 87,500.

It increases to 45% for eligible investments made in approved corporations in eligible classifications within the oceans technology and life sciences sectors, up to $ 112,500.
The maximum annual investment amount is $250,000.

For corporations, the credit is equal to 15% of the eligible investment. The minimum investment amount is $50,000 and the maximum annual investment amount is $500,000. 

When It Ends:

Ongoing

Deadline:

Rolling deadline

Eligibility:

The applicant must:

  • be a taxable Canadian corporation,
  • carry-on a business in Nova Scotia (and be registered in Nova Scotia),
  • be incorporated less than 10 years ago,
  • have its head office in Nova Scotia,
  • use all or substantially all of its assets in an active business,
  • have less than $15 million in assets (including assets of associated corporations),
  • have fewer than 100 employees (including employees of associated corporations),
  • pay at least 50% of its remuneration to employees or full-time contractors who are residents of Nova Scotia and report to or deal with a permanent establishment of the corporation in Nova Scotia,
  • have authorized capital consisting of at least 1 class of common voting shares,
  • be developing or implementing new technologies or applying existing technologies in a new way to create new products, services or processes.
  • not fall under any of the restrictions below:
  • its principal business includes: construction, developing, leasing or selling real property, hotel ownership or management, retail, including food and beverage services, oil or gas exploration, development and production, film, digital animation, or digital media, membership based recreational activities, financial or insurance services,
  • it is incorporated for a self-regulated professional practice,
  • it is a business for which public financial support would be contrary to public policy,
  • it has been issued a Film Industry Tax Credit, Digital Media Tax Credit, Digital Animation Tax Credit, or Capital Investment Tax Credit,
  • it has been approved for or received a payroll rebate or an innovation rebate from Nova Scotia Business incorporated,
  • it has raised (along with all associated corporations) more than $5 million through previous specified issues.

An eligible investor is an individual who is a resident of Nova Scotia and at least 19 years of age or a taxable Canadian corporation which is registered to carry on business in Nova Scotia, has its head office in Nova Scotia, and is not a qualifying venture capital fund under section 27B of the Income Tax Act (Nova Scotia).

Application Steps:

1

Applicant must apply for a Certificate of Registration before accepting investments from eligible investors by submitting the completed application packages via email to the Innovation ETC Administrator.

2

 Applicant must Issue eligible investments to eligible investors through a specified issue.

3

Applicant must apply for Tax Credit Certificates on behalf of all eligible investors who made eligible investments during the time the corporation was registered under the program. The application for Tax Credit Certificates must be received by the department within 6 months of the expiry date on the corporation's Certificate of Registration.

4

Applicant must submit an annual return to the Innovation ETC administrator for each of the 4 years after the expiry date on the certificate of registration.

Documentation Needed: 

To apply for the Certificate of Registration the applicant must submit:

  • the completed and signed application form,
  • the financial statements for the previous tax year, together with a review engagement report or auditor’s report, for the applicant corporation and for all corporations associated with the applicant corporation,
  • T2 Corporate Income Tax Return for the previous tax year of the applicant corporation and of all corporations associated with the applicant corporation (including all forms and schedules),
  • an up-to-date and notarized shareholder’s register,
  • the corporate chart/structure, if applicable,
  • the shareholder agreements, if any,
  • the debenture agreements, if any,
  • the proposed investor forms completed by all proposed eligible investors,
  • a brief business plan,
  • the Certificate of incorporation, constitution/articles of incorporation and memorandum of association.

To apply for the Tax Credit Certificates the applicant must submit:

  • the completed Application Form,
  • the up-to-date and notarized shareholder’s register,
  • an Investor Data Report in Excel,
  • copy of each share certificate or convertible debenture issued to each eligible investor showing the terms of the share/debenture,
  • a signed statement from an authorized officer of the corporation.
  • signed statements from each eligible investor,
  • proof of payment from each eligible investor displaying the amount invested and date of investment.

Other Things to Note:

It's important to note that the deadline for applying for the Nova Scotia Innovation Equity Tax Credit can vary depending on the specific circumstances of your investment and the corporation you invested in. Therefore, it's recommended that you seek professional advice or consult the official guidelines from the Nova Scotia Department of Finance for more detailed information.

Program Contact:

Nova Scotia Department of Finance - Innovation Equity Tax Credit

Innovation-ETC Guidelines.pdf

Canada.ca - NS Innovation Tax Credit

Digital Animation Tax Credit (DATC)

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Amount:

No Fixed Amount

Type of Program:

Tax Credit

Description:

The Nova Scotia Digital Animation Tax Credit (DATC) is a refundable provincial corporate income tax credit which provides incentive for digital-animation productions that start key animation before January 1, 2026.

Comments on Funding:

The DATC is the sum of the:

  1. 1
    50% of qualifying expenditures deducted by total assistance,
  2. 2
    17.5% of eligible digital animation labour expenditures.

When It Ends:

Ongoing

Deadline:

January 1, 2026

Eligibility:

The applicant must:

  • be incorporated in Canada either federally or in one of provinces and be a taxable Canadian corporation,
  • have a “permanent establishment” in Nova Scotia,
  • be Canadian-controlled and primarily engaged in film or video production (more than 50%),
  • not be a labor-sponsored venture capital corporation or registered as an Equity Tax Credit company or a Community Economic Development Investment Fund under subsection 3(2) or 11(2) of the Equity Tax Credit Act,
  • demonstrate that it owns the property rights of the production or have the authorization of the property rights owner to claim the DATC.

Application Steps:

1

Applicant must submit a mandatory Part A application before principal photography or key animation of the digital animation production begins and receive an "eligibility certificate" before an application for the Tax Credit Certificate can be made.

2

Applicant must submit a Part B application for a Tax Credit Certificate once he obtained the eligibility certificate and no later than 30 months after the end of the taxation year in which the expenditures for the eligible production were made.

Documentation Needed: 

The applicant must submit the following documentation in support of his Part A application form:

  • a completed, signed and dated Part A application form,
  • the Synopsis & Script/Treatment of the production,
  • a detailed locked budget signed and dated by the Producer,
  •  the Certificate of Incorporation,
  • the Shareholder Registers (for both the applicant and parent company),
  • the Production Service and/or Co-production agreements, if applicable,
  • the Broadcaster/Distribution agreement, if applicable.

The applicant must submit the following documentation in support of his Part B application form:

  • a completed, signed and dated Part B application form,
  • statements detailing the expenditures of the eligible digital animation production (Producers Affidavit, Review Engagement Report or Audit Report),
  • the Production Service and/or Co-production agreements, if applicable,
  • the Eligibility Certificate,
  • the Certificate of Election, if not provided in the Part A application,
  • the Broadcaster/Distribution agreement, if applicable.

The applicant must also submit the original or a copy of the tax certificate issued by the province with his return.

Other Things to Note:

Date modified: 2022-05-16 - Source 2

Program Contact:

Nova Scotia Department of Finance - Digital Animation Tax Credit

Digital Animation Tax Credit Guidelines

Nova Scotia digital animation tax credit

Digital Media Tax Credit (DMTC)

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Amount:

No Fixed Amount

Type of Program:

Tax Credit

Description:

The Digital Media Tax Credit is a refundable tax credit for costs directly related to the development of interactive digital media products in Nova Scotia.

Comments on Funding:

Funding will be the lesser of 50% of qualifying expenditures, or 25% of total expenditures made in Nova Scotia.

A 10% geographic area bonus on qualifying expenditures (5% bonus on total expenditures) is available for products developed outside the area that is within a radius of 30 kilometers driving distance from Halifax City Hall.

When It Ends:

Ongoing

Deadline:

Rolling Deadline

Eligibility:

The applicant must:

  • be a taxable Canadian corporation,
  • have a “permanent establishment” in Nova Scotia, meaning: a fixed place of business in the province, assets in the province to develop the product and personnel in the province who can contract on behalf of the corporation,
  • be developing an interactive digital media product,
  • not be a prescribed labor-sponsored venture capital corporation under the federal Income Tax Act.

To be eligible for the geographic area bonus, the corporation must:

  • have a permanent establishment in the eligible geographic area, 
  • pay at least 50% of eligible salaries for the development of the eligible product to employees who work out of a permanent establishment in the eligible geographic area.

Application Steps:

1

The applicant must submit the completed, dated and signed application forms to the Nova Scotia Department of Finance and Treasury Board.

Documentation Needed: 

The applicant must submit the following documentation:

  • the application and expenditure form, 
  • Declaration of Residency Forms for all employees listed in the expenditure report,
  • invoices for all third party work completed,
  • statements of eligible remuneration for all invoices,
  • statements detailing the qualifying expenditures and total expenditures of the “eligible product” (Affidavit, Review Engagement Report or Audit Report),
  • Articles of Incorporation and Memorandum of Association,
  • Shareholders Registry,
  • Corporate chart,
  • Gantt Chart,
  • the completed Digital Media Product,
  • the chain of title documentation - if the applicant does not retain principle ownership of the “eligible product”, he must provide a Certificate of Election form signed by the entity who owns the property rights,
  • Exchange of Information Form, which permits the Taxation and Federal Fiscal Relations Division (TFFRD) to exchange information related to the application for audit and verification purposes.

Other Things to Note:

Marketing and distribution expenditures to a maximum of $100,000 per eligible product became part of Qualifying Expenditures

Program Contact:

​Nova Scotia Department of Finance - Digital Media Tax Credit

​DIGITAL MEDIA TAX CREDIT GUIDELINES​​​

Food Bank Tax Credit for Farmers

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Amount:

No Fixed Amount

Type of Program:

Tax Credit

Description:

The Food Bank Tax Credit for Farmers is a non-refundable income tax credit for individuals or corporations that carry on the business of farming and donate agricultural products to eligible food banks in Nova Scotia.  

Comments on Funding:

The credit is 25% of the fair market value of the agricultural products donated.

When It Ends:

Ongoing

Deadline:

Rolling Deadline

Eligibility:

The applicant must:

  • be an individual who carries on the business of farming in Nova Scotia or the individual's spouse or common-law partner, 
  • a corporation that carries on the business of farming in Nova Scotia.

An eligible food bank is a person or entity:

  • that distributes food in Nova Scotia without charge for the relief of poverty as part of its mandate,
  • that is registered as a charity under the Income Tax Act (Canada).

Application Steps:

1

To claim the tax credit the applicant must submit the requested documents.

Documentation Needed: 

To claim the tax credit the applicant must:

  • submit electronically a completed Form NS 428 with his personal income tax and benefit return (T1 return) or file a paper return and attach his completed Schedule 9, if he is an individual or a sole proprietor.
  • be filing a completed Schedule 2, Charitable Donations and Gifts, with his corporation income tax return (T2 return), if it is a corporation.
  • keep all his receipts and documents in case he is asked for them later.

Other Things to Note:

Released December 2016 - Source 1
Date modified: 2022-05-16 - Source 2

Program Contact:

Food Bank Tax Credit for Farmers Guidelines.pdf

Nova Scotia food bank tax credit for farmers