Community Enterprise Development Tax Credit Program
Highlights
This program is a fantastic opportunity for your business. It offers a refundable tax credit of up to 45% for individuals and corporations who invest in community-based enterprises in Manitoba. This means you can get a significant portion of your investment back, making it a financially smart move.
Key Benefits:
- No minimum investment requirement for companies or individual investors.
- Maximum investment of $60,000 per year per investor.
- Lifetime limit of $3 million on shares issued for approved corporations.
By participating, you can attract more investors and boost your business growth. The approval process is straightforward, and the criteria are designed to be accessible. This program provides a unique financing option that stands out from traditional loans, offering substantial tax benefits and encouraging community investment.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- This is a refundable tax credit, so there are no repayment terms or interest rates.
Eligible Expenses:
- Equity capital in community-based enterprises in Manitoba.
Use of Funds:
- The funds can be used to acquire equity capital in approved community-based enterprises.
Restrictions on Use of Funds:
- The funds cannot be used for any expenses outside of acquiring equity capital in community-based enterprises.
Fees:
- There are no fees associated with this tax credit program.
Qualifications
- Must be a Cooperative incorporated under The Cooperatives Act or a taxable Canadian Corporation incorporated under The Corporations Act.
- Assets must be used in active business.
- Net assets must be less than $10 million.
- Gross assets must be less than $25 million.
- Must have less than 200 full-time equivalent employees.
- At least 25% of employees must reside in Manitoba.
- Approved corporations have a $3 million lifetime limit on shares issued.
Investors can invest a maximum of $60,000 per year.
Disqualifications:
- Businesses with net assets of $10 million or more.
- Businesses with gross assets of $25 million or more.
- Businesses with 200 or more full-time equivalent employees.
- Businesses where less than 25% of employees reside in Manitoba.
Description
The Community Enterprise Development Tax Credit (CEDTC) offers a refundable tax credit of up to 45% for individuals and corporations investing in community-based enterprises in Manitoba. This means that if you invest in these businesses, you can get almost half of your investment back as a tax credit.
There is no minimum investment required, so you can invest any amount that suits your budget. However, each investor can only claim up to 10% of the total tax credit issuance. This ensures that the benefits are spread across many investors.
Corporations can issue shares up to a $3 million lifetime limit, and investors can put in a maximum of $60,000 per year. This program is a great way to support local businesses while receiving significant tax benefits. It’s a win-win for your business and the community.
Program Steps
Download the Application Form: Obtain the application form from the provided link or request it from the Economic Programs Branch.
Prepare Required Documentation: Gather the necessary documents to support your application. These include:
- Proof of incorporation under The Cooperatives Act or The Corporations Act.
- Financial statements showing net and gross assets.
- Employee records to verify that at least 25% of employees reside in Manitoba.
- Business plan detailing the use of assets in active business.
Complete the Application Form: Fill out the application form with accurate and detailed information about your business.
Review the Income Tax Act: Familiarize yourself with sections 11.8 to 11.12 of The Income Tax Act (Manitoba) and the related regulations to ensure compliance.
Submit the Application: Send the completed application form and all required documentation to the Economic Programs Branch at the address provided:
- 1010 - 259 Portage Avenue
- Winnipeg, MB R3B 3P4
- General Email: [email protected]
Await Confirmation: Wait for confirmation from the Economic Programs Branch that your application has been received and is under review.
Respond to Any Follow-Up Requests: Be prepared to provide additional information or clarification if requested by the Economic Programs Branch.
Receive Approval: Upon approval, you will be notified and provided with details on the issuance of shares and the tax credit process.
Issue Shares: Follow the guidelines provided to issue shares to investors, ensuring compliance with the program's requirements.
Claim Tax Credit: Investors can then claim the refundable Manitoba tax credit of up to 45% on their tax returns.