FIN-Small Business Investor Tax Credit Program

This document is based on information from the Department of Finance Web site, February 2008.

Small Business Investor Tax Credit Program

The New Brunswick Small Business Investor Tax Credit provides a 30 per cent non-refundable personal income tax credit of up to $24,000 per year (for investments of up to $80,000 per investor) to eligible 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, but may not be carried back to any year preceding the 2003 taxation year.

Eligibility Criteria

All business sectors in New Brunswick will be eligible to participate.

Summary

Program Objective

• Provide an important source of capital by increasing access to equity financing for New Brunswick small businesses.
• Encourage investment by New Brunswick residents in New Brunswick small businesses.

Program Process
The program has a two-stage process: application for a Certificate of Registration, followed by application for a Tax Credit Certificate.

• Certificate of Registration
  Corporations that want to take advantage of the program and are approved to sell shares in New Brunswick will file an application with the New Brunswick Department of Finance on a form provided by the provincial Minister of Finance.

One of the requirements will be the submission of an investment plan that outlines the proposed use of the capital. The application will be approved if the Minister of Finance is satisfied that specific conditions are met.

• Tax Credit Certificate
  Within 30 days of when eligible shares are sold, the business must provide proof of sale, along with required information on each investor, to the New Brunswick Department of Finance on a form provided by the provincial Minister of Finance. The Minister of Finance will issue a Tax Credit Certificate to eligible investors on approved purchases of shares.

Individual investors will attach these certificates to their personal income tax returns to obtain the reduction in provincial income tax payable.

Tax Credit  
An investment may be made within the first 60 days of a calendar year and may be claimed as a tax credit in the prior taxation year.  The tax credit is 30 per cent of the investment up to the maximum annual tax credit per investor of $24,000. The credit is not refundable but may be carried forward for seven years or carried back three years, but no deduction shall be made for a taxation year preceding the 2003 taxation year.

For more information on the Small Business Investor Tax Credit Program, please visit the Department of Finance Web site at: http://www.gnb.ca/0162/tax/sbitc/smallbusiness.asp or call 506-453-2404.

New Brunswick Contact(s):
Small Business Investor Tax Credit Program
Department of Finance
Centennial Building
670 King Street
P. O. Box 3000
Fredericton, New Brunswick  E3B 5G5
Telephone: 506-453-2404
Fax: 506-444-5086
E-mail: wwwfin@gnb.ca