Canada: New details on venture capital tax credit (Nova Scotia)
Canada: New details on venture capital tax credit
Regulations address the 15% tax credit available with regard to eligible investments in Nova Scotia.
Details in new regulations concerning the non-refundable 15% venture capital tax credit provide that eligible investors can claim the tax credit on a maximum eligible investment of $500,000.* Any unclaimed credit can be carried forward seven years or back three years, to a tax year ended on or after 1 April 2019.
The venture capital tax credit allows eligible corporations and individuals who invest in a qualifying venture capital fund to claim a non-refundable 15% income tax credit on qualifying investments made after 31 March 2019 and before 1 April 2024. This credit was first introduced in Nova Scotia's 2019 budget.
To claim the credit, investors must:
- Be either an individual resident of Nova Scotia (at least 19 years old) or a taxable Canadian corporation with a head office in Nova Scotia
- Have received the appropriate tax credit certificate from the province
- Satisfy a four-year holding period
To be considered a qualifying venture capital fund, a corporation or limited partnership must meet several conditions—including that its head office is located in Nova Scotia; that it has equity capital of at least $25,000; and that it uses the funds raised through an authorized equity capital raise to make qualifying small business investments and meet certain approval and certification requirements.
Read a November 2020 report prepared by the KPMG member firm in Canada
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