NOTE: Corporations that apply for and receive a Certificate of Registration under the previously available Equity Tax Credit program on or after January 1st, 2019 are NOT eligible corporations in the Innovation Equity Tax Credit program.
The Innovation Equity Tax Credit (Innovation ETC) is a non-refundable personal and corporate income tax credit available to eligible investors who invest in approved corporations.
The credit is meant to encourage investors to make equity capital investments in eligible Nova Scotia small and medium corporations engaged in innovative activities contributing to inclusive economic growth and increase investment in innovation that would not happen anyway. The investments incented by this program are meant to provide the capital required for research, development or commercialization of new technology, new products or new processes.
The credit for an eligible investor who is an individual is equal to 35% of an eligible investment made in an approved corporation. The credit for an eligible investor who is an individual increases to 45% for an eligible investment made in an approved corporation in an eligible classification within the oceans technology and life sciences sectors. The maximum annual investment amount for an individual is $250,000.
The credit for an eligible investor that is a corporation is equal to 15% of an eligible investment made in an approved corporation. The maximum annual investment amount for a corporation is $500,000.
Innovation Equity Tax Credit Regulations
Guidelines
Application for a Certificate of Registration
Corporations must apply for a Certificate of Registration before accepting investments from eligible investors.
Application for Tax Credit Certificates
After a specified issue is complete, approved corporations must apply for tax credit certificates on behalf of all eligible investors who made eligible investments during the time the corporation was registered under the program. The application for tax credit certificates must be received by the department within 6 months of the expiry date on the corporation's certificate of registration.
Annual Returns
Approved corporations, which have completed a specified issue, must submit an annual return to the Innovation ETC administrator. Each annual return must be submitted within 90 days of the approved corporation's tax year end for each of the 4 years after the expiry date on its certificate of registration.
NOTE: Completed application packages and annual returns must be submitted via email to the Innovation ETC Administrator. Paper applications are not accepted.