Type of Program:
The Direct Equity Tax Credit is designed to encourage private investment in new or expanding small businesses as a means of creating new jobs and diversifying the economy. An investment credit, in the form of a provincial income tax credit, is available to individuals and arm’s length corporations who invest as shareholders in eligible small business activities.
Comments on Funding:
There are two tax credit rates:
- a 35% rate applies when the qualifying activities are undertaken in the Province outside the North East Avalon,
- a 20% rate applies when the qualifying activities are undertaken within the North East Avalon.
In cases where qualifying activities are undertaken in both areas, a reasonable proration applies.
The maximum annual tax credit per eligible investor is $50,000.
When It Ends:
The applicant must:
In order to qualify as an eligible business, a corporation shall:
make an application to the Department of Finance to obtain certification. This verifies that the specified shares are eligible for the tax credit. Pre-approval of eligibility is required.
submit an official tax credit receipt with the individual’s T1 Income tax return or the corporation’s T2 income tax return.
Applicant must submit:
The following information should be included with the application: