Small Business Investor Tax Credit Program

Overview of the Small Business Investor Tax Credit Program program:

The New Brunswick Small Business Investor Tax Credit provides a 50% (for investments made after April 1, 2015) non-refundable personal income tax credit of up to $125,000 per year (for investments of up to $250,000 per individual investor) to eligible individual investors who invest in eligible small businesses and/or community economic development corporations (CEDC) or associations (co-op) in the province. Effective January 1, 2014, the Small Business Investor Tax Credit legislation enables. New Brunswick corporations and trusts to be eligible for a 15% non-refundable corporate income tax credit on eligible investments up to $500,000. This translates into a tax credit of $75,000 for New Brunswick corporate and trust investors who invest in eligible small businesses in the province In the event that an investor cannot use the entire Small Business Investor Tax Credit amount in a given year, the tax credit can be carried forward seven years or back three years.

Benefits of the Small Business Investor Tax Credit Program program:

• Provide an important source of capital by increasing access to equity financing for New Brunswick small businesses, community economic development corporations and associations.
• Encourage investment by New Brunswick residents in New Brunswick small businesses, community economic development corporations, and associations.

Eligibility criteria of the Small Business Investor Tax Credit Program program:

• Applicant Corporation Eligibility Criteria
• To register in the Small Business Investor Tax Credit program, the applicant corporation must meet the following criteria:
• The corporation must be a private company
• The corporation is incorporated or registered to carry on business in New Brunswick
• The corporation must have authorized capital consisting of shares without par value
• The corporation must have net tangible assets less than $40 million (including associated corporations)
• All, or substantially all, of the corporations assets and income must be used to generate active business income in New Brunswick
• The corporation must pay, in each of the four years after the date of registration, at least 75% of its wages and salaries to individuals who are residents of New Brunswick unless the corporation exports outside of N.B. more than 50% of their goods and services, then, the requirement is for 50% of its wages and salaries to individuals who are resident of New Brunswick
• The corporation is not lending money, providing a loan guarantee or any other financial assistance, to a person for the purchase of shares included in a specified issue under the Small Business Investor Tax Credit Program
• That the issued shares will not be purchased by investors who have disposed of shares of the corporation after Dec. 10, 2002, and before the proposed share issuance
• The shares to be issued are newly issued, fully paid shares of the capital stock of a corporation that is registered under the Small Business Investor Tax Credit Act and will not include a replacement share.