Newfoundland and Labrador direct equity tax credit

You can claim this credit for an investment in eligible shares of a business with which you deal at arm's length.

There are two tax credit rates:

• for qualifying activities undertaken in the province outside the Northeast Avalon, a 35% rate applies;
• for qualifying activities undertaken within the Northeast Avalon, a 20% rate applies.

In cases where qualifying activities are undertaken in both areas, a reasonable proration applies.

The maximum credit you can claim is $50,000 per year, including any amounts carried back or carried forward.

This credit must be claimed against tax otherwise payable before the Newfoundland and Labrador small business tax holiday.  You can carry forward unused credits for seven years or back three years.

The province of Newfoundland and Labrador will issue Form NLDETC-1, Newfoundland and Labrador Direct Equity Tax Credit, as a receipt for eligible investments.

Claiming the credit

File a completed Schedule 303, Newfoundland and Labrador Direct Equity Tax Credit. See the schedule for more details.

On line 505 of Schedule 5, Tax Calculation Supplementary - Corporations, enter the amount of the credit.

Supporting documents - File Form NLDETC-1 with your return.

Forms and publications

• Schedule 303, Newfoundland and Labrador Direct Equity Tax Credit
• Schedule 5, Tax Calculation Supplementary - Corporations

Government partners

• Newfoundland and Labrador (provincial site)