Canada: Corporate tax credits (Newfoundland and Labrador)

New “green technology” tax credit and manufacturing and processing investment tax credit

Newfoundland and Labrador

Newfoundland and Labrador's Bill 54—that includes the new “green technology” tax credit and manufacturing and processing investment tax credit—received first reading. These measures were announced in Newfoundland and Labrador's 2022 budget on 7 April 2022.

  • The “green technology” tax credit would provide a 20% tax credit on certain capital costs for eligible Canadian-controlled private corporations. The maximum credit is $1 million* annually and must be shared among associated corporations. This tax credit would apply to investments in equipment included in capital cost allowance classes 43.1 or 43.2, such as equipment for energy conservation, clean energy generation and efficient use of fossil fuels. To qualify for the credit, the property must be located in the province and acquired for and used in a business operating in the province. The tax credit would be up to 40% refundable.
  • The manufacturing and processing investment tax credit would provide a 10% tax credit on investments in certain capital property. The tax credit would apply to eligible capital costs for buildings, machinery and equipment within the manufacturing, fishery, farming and forestry sectors in certain circumstances. To qualify for the credit, the property must be located in the province and acquired for and used in a business operating in the province. The credit would be up to 40% refundable for eligible Canadian-controlled private corporations.

Read a May 2022 report prepared by the KPMG member firm in Canada

 

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