Atlantic Canada Business Grants

Innovation Equity Tax Credit

Amount:

$ 112,500

Type of Program:

Tax Credit

Description:

The Innovation Equity Tax Credit (Innovation ETC) is a non-refundable personal 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.

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.

An eligible investor is an individual who is a resident of Nova Scotia and at least 19 years of age.

Application Steps:

The applicant must:

1

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

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.

3

submit an annual return to the Innovation ETC administrator.

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.

Program Contact:

​Nova Scotia Department of Finance - Innovation Equity Tax Credit

​Innovation-ETC Guidelines.pdf​​​

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