The Venture Capital Tax Credit (VCTC) is a non-refundable personal and corporate income tax credit available to eligible investors who invest in qualifying venture capital funds.

The credit is meant to encourage investment in professionally managed venture capital funds which in turn make equity capital investments in eligible small and medium corporations within Atlantic Canada.

Please see the VCTC Guidelines for more information on the tax credit amount, eligibility requirements, and the application process.

Tax Credit Amount

The credit for individual and corporate eligible investors is equal to 15% of eligible investments made in a qualifying venture capital fund. The maximum annual investment amount is $500,000.

How to Apply

There are multiple steps that a venture capital fund must take to ensure that their eligible investors are able to claim and retain the tax credit.

1. A venture capital fund must first apply for a Certificate of Registration to become registered as a qualifying venture capital fund.
   
   
   • Certificate of Registration Application Form


2. Qualifying venture capital funds must apply for approval to carry out authorized raises of equity capital. Signed statements from each qualifying small business the fund will be investing in must be submitted with its application to raise equity capital.
   
   
   • Authorized Raise of Equity Capital Application Form
   • Qualifying Small Business Signed Statement

Eligible investments from eligible investors can only be accepted during an authorized raise of equity capital.


3. At the end of an authorized raise of equity capital, qualifying venture capital funds must apply for tax credit certificates on behalf of all eligible investors who made eligible investments. A signed statement from each eligible investor and an investor data report is required with each application.
   
   The application for tax credit certificates must be received by the department within 6 months of the expiry date of the qualifying venture capital fund's authorized raise of equity capital.
   
   
   • Tax Credit Certificate Application Form
   • Eligible Investor Signed Statement (Individuals)
   • Eligible Investor Signed Statement (Corporations)
   • Investor Data Report


4. A qualifying venture capital fund which has completed an authorized raise of equity capital must submit an annual return to the program administrator. Each annual return must be submitted within 90 days of the qualifying venture capital fund's tax year end for each of the 4 years after the expiry date of an authorized raise of equity capital.
   
   
   • Annual Report Template

All application packages must be submitted via email to the program administrator. Paper applications will not be accepted.

Once approved, tax credit certificates are issued directly to the investors and may then be claimed via
the individual's personal income tax return or corporation's corporate income tax return for the tax
year stated on the certificate.

Related Legislation and Regulations

• Section 37B of the Income Tax Act
• Venture Capital Tax Credit Regulations