Direct Equity Tax Credit

The Direct Equity Tax Credit Program (DETC) is designed to encourage private investment in new or expanding small businesses as a means of creating new jobs and diversifying the economy. An investment credit, in the form of a provincial income tax credit, is available to individuals and arm’s length corporations who invest as shareholders in eligible small business activities. There are two tax credit rates. Where the qualifying activities are undertaken in the Province outside the North East Avalon, a 35% rate applies. Where the qualifying activities are undertaken within the North East Avalon, a 20% rate applies. In cases where qualifying activities are undertaken in both areas, a reasonable proration applies. An official tax credit receipt must be submitted with the individual’s T1 Income tax return or the corporation’s T2 income tax return.

For more information about corporate income taxes in Newfoundland and Labrador, please contact the Tax Administration of the OCG.

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