Government is introducing new and expanded non-refundable tax credits to encourage investment in Nova Scotia’s small and medium-sized businesses.
Amendments to the Income Tax Act introduced today, April 4, will create the Venture Capital Tax Credit and expand the Innovation Equity Tax Credit to allow corporate investors to make direct equity investments in other Nova Scotia businesses.
“Venture capital is essential for a flourishing start-up community,” said Finance and Treasury Board Minister Karen Casey. “These tax credits will encourage new investments in local companies, so they can explore new economic opportunities and drive innovation, growth and jobs.”
Two-million dollars will be budgeted for the Innovation Equity Corporate Tax Credit to create a 15 percent non-refundable tax credit for corporations, in addition to the $10 million for individual investors that became effective in January 2019.
Three-million dollars will also be allocated for the Venture Capital Tax Credit with $2 million for individuals and $1 million for corporate investors. Investors will be eligible for a 15 percent non-refundable tax credit.
The tax credits will benefit Nova Scotia’s homegrown entrepreneurs and companies that are developing or implementing new technologies or applying technologies in an innovative way to create new products or services.
Investors will be able to pool resources with others, while relying on professional management to select investment portfolios.
“This will help drive more angel investment and venture capital investment, which is needed for our growing startup community,” said Jeff Larsen, site lead of Creative Destruction Lab Atlantic. “It will result in new jobs for young people and economic growth that benefits the whole province.”
The changes will be in effect as early as this spring.