Venture Capital Tax Credit
The Venture Capital Tax Credit Program (VCTC) is designed to encourage investment in businesses which can provide the highest returns to the provincial economy, and to encourage growth in industries such as information technology, and clean and ocean technologies, among others.
The VCTC allows investors to qualify for a non-refundable tax credit equal to 30 percent of the amount invested in a Qualifying Venture Capital Fund (QVCF).
Offered by Department of Finance
Amount
Non-refundable tax credit equal to 30% of the amount invested in the qualifying venture capital fund (QVCF), to a maximum tax credit of $75,000 per investor (maximum lifetime investment of $250,000)
Quick eligibility check
Who can apply
Applicants must:
- be individual or corporate investors that purchase shares in the fund, which then uses capital raised from investors to make equity investments in qualifying businesses (business activities include intellectual property, information technology, clean, ocean and marine technologies, life sciences and new media sectors and manufacturing and processing of value-added goods for export),
- hold the shares for a minimum 5 years or the tax credit has to be repaid in proportion to the amount of time the shares were held.
About the funding
To qualify for the credit, investors purchase shares in the fund, which then uses capital raised from investors to make equity investments in qualifying businesses. Decisions on investments will be made by the fund manager, Venture Newfoundland and Labrador Limited Partnership.
- What is the Venture Capital Tax Credit?
The Venture Capital Tax Credit Program (VCTC) is a provincial non-refundable tax credit available for both individual and corporate investors, but not trusts, equal to 30% of the amount invested in the qualifying venture capital fund (QVCF) through the purchase of limited partnership units or newly issued shares.
- The maximum lifetime investment in the QVCF by each investor would be limited to $250,000, resulting in a maximum tax credit of $75,000 to be applied against provincial income tax that is otherwise payable.
Show all funding details
- Unused credit can be carried back 3 years and forward 7 years until the full amount of the credit has been used or the time expired. However, you cannot claim any credit in a year before 2014.
- Eligible investment for RRSP contribution.
- Shares must be held for a minimum 5 years or the tax credit has to be repaid in proportion to the amount of time the shares were held.
Similar programs
| Program | Type | Amount | Status |
|---|---|---|---|
| Aquaculture Capital Equity Program | Investment | Minimum investment of $250,000 for finfish operations and $100,000 for shellfish operations (no maximum investment level) | Open |
| Direct Equity Tax Credit | Tax Credit | Tax credit of 35% of the investment where qualifying activities are outside the North East Avalon or 20% within it | Open |
| Investment Attraction Fund | Loan, Investment | No fixed amount | Open |
| BDC Growth & Transition Capital: Transfer a business | Loan, Investment | Financing from $250,000 to $35M, repayable over a period of 2 to 8 years, with capital payments postponable for the first 12 months | Open |
