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Equity Tax Credit

NOTE: As announced in Budget 2019-20, the Equity Tax Credit is ending as of December 31, 2019 for private corporations and co-operatives. All applications for a Certificate of Registration must be received on or before this date for investments to qualify for the Equity Tax Credit. The Innovation Equity Tax Credit is now available for eligible private corporations.

The Equity Tax Credit for CEDIFs (Community Economic Development Investment Funds) will continue to be available after December 31, 2019.

NOTE: A corporation cannot get both an Equity Tax Credit and an Innovation Equity Tax Credit at the same time. Corporations that apply for and receive a Certificate of Registration under the Equity Tax Credit program on or after January 1st, 2019 are NOT eligible corporations in the new Innovation Equity Tax Credit program.

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

Eligibility

Guide for Private Corporations & Co-operatives

Guide for CEDIFs

CEDIF Historical Amounts Raised

For Investors
For Business

How to ApplyAn 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: 
    - CEDIF Application (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 notarized copy of the current shareholders register showing the dates of ALL TRANSACTIONS (purchases, sales and transfers)
  • CED corporations or co-operatives must submit the most recent draft of the Offering Document

Equity Tax Credit

Orange ClockFor More Information

 

Elvira Dalag,
Revenue Officer
Tel:  902.424.2808
Emailnovascotia.ca