The Equity Tax Credit (ETC) was designed to assist Nova Scotia small businesses, co-operatives and community economic development initiatives in obtaining equity financing by offering a personal income tax credit to individuals investing in eligible businesses.
- For investment made before January 1, 2010: calculated at 30 per cent of investment made by individual to a maximum annual investment of $50,000 (maximum annual credit of $15,000; includes current year and the carry forward or back amounts)
- For investment made after December 31, 2009: calculated at 35 per cent of investment made by individual to a maximum annual investment of $50,000 (maximum annual credit of $17,500, includes current year and the carry forward or back amounts)
- Investment may be made within the calendar year or within 60 days of the taxation year end
- Credit is not refundable but may be carried forward for 7 years or carried back 3 years
For InvestorsHow to Apply
An eligible business must make application to the Nova Scotia Department of Finance and Treasury Board to obtain a Certificate of Registration prior to issuing shares to investors. This certificate makes the specified shares eligible for the tax credit.
Pre-approval of eligibility is required. This eligibility does not constitute any approval that may be required from the Nova Scotia Securities Commission under the Nova Scotia Securities Act.
Note: Applications by CED corporations or cooperatives require community economic development plans containing the economic development strategy of the organization, the community it serves, the amount of capital to be raised by the issue, details of the type of shares to be issued and provisions for the issue of investment certificates.
The following information must be included with the application:
- Completed application form (select the one that describes your organization):
- Private Corporation (pdf)
- Co-operative (pdf)
- Community Economic Development Initiatives (pdf)
- Financial statements for the preceding taxation year and a copy of the T2 income tax return, (this is not required for first year corporations)
- A copy of the articles of association or constitution of the corporation and memorandum of association
- A copy of current shareholder register
- In the case of private corporations, a list of 3 proposed investors including name, address, social insurance number and occupation along with a signed statement from each that the information contained in the application with respect to each investor is true and correct and that their investment will meet the spirit and intent of the Act
- Except in the case of CED corporations or co-operatives, a business plan detailing the amount to be raised by the specified issue, the proposed use of funds raised by the issue, a summary of the major business activities of the corporation including major revenue sources and a listing of all directors of the corporation including names, addresses and background information.