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.

1000

Related content

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.


Eligibility criteria

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


*$=Canadian dollar

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal