How do I apply for Direct Equity Tax Credit?

Visit Government of Newfoundland and Labrador, Department of Finance's website for application instructions.

Who administers Direct Equity Tax Credit?

This program is administered by Government of Newfoundland and Labrador, Department of Finance.

Are there similar programs to Direct Equity Tax Credit?

Yes! Canada Grants Database has similar programs in the Tax Credits & Incentives category. Browse our database to find more options that match your needs.

How can I improve my chances of getting approved for Direct Equity Tax Credit?

Our detailed breakdown covers step-by-step application instructions, required document checklists, and eligible expense breakdowns so you know exactly what to prepare before applying.

Direct Equity Tax Credit

Government of Newfoundland and Labrador, Department of Finance

📊 Tax Credits & Incentives🗺️ Provincial🏪 Small Business🌱 Early-Stage📈 Growth

Tax credit for Newfoundland and Labrador investors

Funding

$500,000 - $500,000

Deadline

Ongoing

Status

Ongoing

What Is This Program?

Tax credit of 20% (North East Avalon region) or 35% (other regions) for individuals and corporations who invest as shareholders in Newfoundland and Labrador small businesses for start-up, modernization and growth.

What Benefits Are Offered?

tax credit

A provincial income tax credit for individuals and arm’s length corporations who invest as shareholders in eligible new or expanding small businesses in Newfoundland and Labrador. The credit rate is 35% for qualifying activities outside the North East Avalon, and 20% for activities within the North East Avalon, with proration for activities in both areas. It aims to encourage private investment, job creation, and economic diversification.

Who Is Eligible?

Business Size: small

Region: Newfoundland and Labrador

Other Criteria: new or expanding businesses, eligible small business activities, investors must be individuals or arm's length corporations, investors must act as shareholders

🏆 Detailed Application Guide

Preview of what's included with full access:

📋What Are the Application Steps & Timeline?

📝Steps to Apply: Complete the application form
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🌐Application Portal: https://www.gov.nl.ca/fin/tax-programs-incentives/business/directequitytaxcredit/
📤Submission Method: mail
🔄Intake Type: rolling

📄What Documents Are Required?

✅Required Documents: names and addresses of all directors of the corporation
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📐Format Requirements: PDF only, max 10MB
📥Templates Available: Direct Equity Tax Credit Program Application

💰What Expenses Are Eligible?

🧾Eligible Expenses: investment in new or expanding small businesses
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🚫Ineligible Expenses: lending
paying dividends
the purchase or redemption of shares
the payment of debt, debt reduction or refinancing an existing debt
the purchase of all or part of a business as a going concern
the purchase of all or substantially all of the assets of a previously existing proprietorship, partnership, joint venture, trust or company
the purchase of assets or services by the eligible business for a price greater than fair market value
📏Expense Caps: maximum annual investment in eligible shares is $250,000 in the North East Avalon, where the tax credit rate is 20%, and almost $143,000 outside the North East Avalon, where the tax credit rate is 35%
💳Payment Model: reimbursement
⏪Retroactive Expenses Eligible: No

🤝Is Matching Funding Required?

🔀Matching Required: Yes
📊Matching Ratio: 25% minimum
🏦Eligible Matching Sources: cash
📚Stacking Rules: Not specified
🛡️Proof of Matching Required: An official tax credit receipt must be submitted with the individual’s T1 Income tax return or the corporation’s T2 income tax return.

📊What Are the Reporting Requirements?

🗓️Reporting Frequency: annual
📑Reporting Requirements: financial statements for the most recent year end
income tax returns for the preceding taxation year
detailed status report of shareholdings for five years after specified share issuances
🔍Audit Requirements: Eligible businesses shall supply information confirming the use or disposition of capital raised under the Direct Equity Tax Credit program.
📢Branding Requirements: An official tax credit receipt must be submitted with the individual’s T1 Income tax return or the corporation’s T2 income tax return.
🗄️Record Retention Period: 5 years