Capital Investment Tax Credit (CITC)

By mmuise
Description:

The Nova Scotia Capital Investment Tax Credit (CITC) is a refundable corporate tax credit that can be claimed for capital costs directly related to acquiring qualified property for use in Nova Scotia as part of an approved project.
The CITC is aligned, but not harmonized with, the federal government’s Atlantic Investment Tax Credit (AITC).


Comments on Funding:

Tax Credit Amount for property acquired before 1 October 2022:
- The tax credit is 15% of the capital cost of acquired qualified property minus related government assistance acquired before 1 October 2022. The maximum tax credit available for each approved project is $30 million across the duration of the project.
Tax Credit Amount for property acquired on or after 1 October 2022:
- The tax credit is 25% of the capital cost of acquired qualified property minus related government assistance acquired on or after 1 October 2022. The maximum tax credit available for each approved project is $100 million across the duration of the project.

Deadline: Rolling deadline
Eligibility:

The applicant must:

  • be a taxable Canadian corporation,
  • have a permanent establishment in Nova Scotia,
  • with certain exceptions, be corporations in the manufacturing, processing, fishing, farming, logging, storing grain and harvesting peat sectors,
  • have acquired capital equipment as part of an "approved project".
Application Steps:

The applicant must submit:

1. a mandatory Part A application and receive an "eligibility certificate" before an application for the tax credit can be made.

2. a Part B application for a tax credit certificate once he obtained the eligibility certificate and no later than 18 months following the end of the taxation year in which the qualified property was acquired. Multiple Part B application for tax credit certificates can be made since projects can run over a period of up to 5 years.

Documentation Needed:

The applicant must submit the following documentation in support of his Part A application form:
1. proof that the corporation is an "eligible corporation" and that its corporate registration is in good standing,
2. financial statements (projected financial statements for taxation years during project period and financial statements for the preceding taxation year),
3. a business plan for the project,
4. the T2 corporate tax return and notice of assessment if the project is underway and qualified property has already been acquired,
5. the loan agreements for all loans provided by public authorities,
6. any additional information deemed necessary by the Minister.
The applicant must submit the following documentation in support of his Part B application form:
1. proof of the capital cost of each qualified property,
2. a statement identifying the qualified property that was acquired in respect of and that matches the business plan submitted in support of the eligibility certificate,
3. a statement detailing any government assistance with respect to the qualified property,
4. a status report of the project and explanation for any deviation from the business plan submitted in support of the eligibility certificate,
5. the T2 corporate tax return and notice of assessment for the taxation year immediately preceding the taxation year for which a tax credit certificate is sought,
6. a draft copy of the corporation's Schedule 31 for the T2 corporate return in the taxation year for which the tax credit is being applied for,
7. a copy of the corporation's CITC eligibility certificate,
8. any additional information deemed necessary by the Minister,

Other Things to Note:

Page last updated 2019-08-13.
New Guidelines were published in April 2023.

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mmuise