Enriched Investment Tax Credit
Highlights
This program is designed for businesses like yours in Prince Edward Island. It offers a 25% provincial corporate tax credit on costs associated with qualified manufacturing and processing equipment. This credit can significantly reduce your tax burden, freeing up capital for other essential business needs.
Key Benefits:
- Substantial Tax Savings: The 25% tax credit can be applied against future corporate income taxes, providing immediate financial relief.
- Support for Growth: The program supports investments in new machinery and equipment, helping you enhance productivity and expand your operations.
- Easy Qualification: If your business is actively operating in PEI and focuses on manufacturing, processing, or exporting, you likely qualify.
Applying for this program can provide your business with the financial boost needed to invest in high-productivity applications, ultimately driving growth and competitiveness in your industry.
Financing Details
Type of Financing: The Enriched Investment Tax Credit is a tax credit.
Repayment Terms and Interest Rates:
- There are no repayment terms or interest rates because this is a tax credit.
Eligible Expenses:
- The tax credit applies to qualified manufacturing and processing equipment.
- The equipment must be new and used primarily for manufacturing or processing in Prince Edward Island.
Ineligible Uses:
- The funds cannot be used for equipment that has been previously used or leased before acquisition by the company.
Fees:
- There are no fees associated with applying for or receiving this tax credit.
Qualifications
- Must be located in Prince Edward Island.
- Must be registered to do business and actively operating in Prince Edward Island.
- Must manufacture, process, or develop goods or services primarily for export.
Must operate within one of the following strategic sectors:
- Bioscience
- Aerospace and defence
- Advanced manufacturing and processing
- Renewable energy and clean technology
- Information and communications technology
- Creative and cultural industries
- First-of-its-kind exportable goods or services in other sectors may be considered.
Disqualifications:
- Businesses with a defaulted outstanding debt obligation on file in the Province’s Central Default Registry.
- Applicants in default on any reporting, project completion, or financial obligation to Innovation PEI until the default is resolved.
Description
The Enriched Investment Tax Credit is a great opportunity for your business. It offers a 25% provincial corporate tax credit on costs related to qualified manufacturing and processing equipment. This means you can save a significant amount on your investments in new machinery or equipment.
You can use this credit to purchase new machinery or equipment that hasn't been used or leased before. This equipment must be used primarily for manufacturing or processing in Prince Edward Island. The credit will be applied against your future corporate income taxes, reducing your financial burden.
The combined funding from all non-repayable government sources can cover up to 75% of eligible costs. This program is designed to support your business's growth and productivity, making it easier for you to invest in high-productivity applications with a strong export focus.
Program Steps
Consult with a Business Development Officer: Contact an Innovation PEI Business Development Officer to discuss your project and get guidance on the application process.
Prepare Documentation: Gather the necessary documents to support your application. These include:
- A history and description of your business.
- Detailed financial statements for the previous two years (for existing businesses).
- A completed business plan (for new businesses).
- A description of the proposed project or activity.
- A detailed description of the economic benefits to your organization and Prince Edward Island.
- Detailed cost estimates for the proposed project or activity, supported by written quotations.
- Information on the source of funds for the project (e.g., lending institutions, banks, government loans and/or grants).
- An explanation of your business's current market position and projected market, including any increases in market share.
- A list of all shareholders and key management personnel.
Complete the Application: Fill out the application form with all required information and attach the prepared documentation.
Submit the Application: Ensure the application is submitted before making any financial or legal commitments on the project.
Review and Approval: Wait for Innovation PEI to review your application. They will evaluate it based on the economic benefit to Prince Edward Island and other criteria.
Accept the Letter of Offer: If your application is approved, you will receive a letter of offer stating the terms and conditions. Accept this letter to formalize the contract between you and Innovation PEI.
Monitor Performance: Adhere to the terms and conditions outlined in the letter of offer. Innovation PEI may require ongoing performance monitoring to ensure compliance.