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.

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

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