Regional Opportunities Investment Tax Credit
Highlights
This program is designed for businesses like yours, offering a 10% refundable Corporate Income Tax credit for investments over $50,000 in designated regions. This means you can receive up to $45,000 in tax credits annually, helping you to expand, renovate, or acquire commercial and industrial properties.
Why Apply?
- Boost Growth: The tax credit supports your business in expanding operations, creating jobs, and driving economic growth.
- Financial Relief: With the temporary enhancement, you can get an additional 10% credit for eligible expenditures, potentially receiving up to $90,000 in a year.
- Government-Backed: This credit is backed by the government, ensuring reliability and support.
What's in it for You?
- Significant Savings: Reduce your tax burden and reinvest those savings into your business.
- Easy Qualification: If your business meets the criteria, qualifying is straightforward and beneficial.
Applying for this program can provide the financial boost your business needs to thrive and grow in designated regions.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- This is a refundable Corporate Income Tax credit.
- There are no repayment terms or interest rates as it is not a loan.
Eligible Expenses:
- Investments in constructing, renovating, or acquiring eligible commercial and industrial buildings.
- Expenditures must exceed $50,000 and be up to a maximum of $500,000.
- Eligible properties must be located in designated regions and fall under capital cost allowance classes 1 or 6.
Use of Funds:
- Funds can be used for:
- Construction of new commercial or industrial buildings.
- Renovation of existing commercial or industrial buildings.
- Acquisition of eligible commercial or industrial buildings.
Restrictions on Use of Funds:
- Funds cannot be used for residential buildings.
- Investments must be made in designated regions only.
Fees:
- There are no fees associated with this tax credit program.
Qualifications
- Must be a Canadian-controlled private corporation throughout the tax year.
- Must have a permanent establishment in Ontario at the time a qualifying investment is made.
- Must make a qualifying investment in a designated region of the province.
- Investment must exceed $50,000.
- Investment must be used to acquire, construct, or renovate an eligible property.
- Eligible properties include commercial or industrial buildings (or other structures) included in capital cost allowance classes 1 or 6 for income tax purposes.
- Investment must become available for use on or after March 25, 2020, and in the taxation year in which the tax credit is being claimed.
Investment must be made in one of the designated regions listed below:
Northern Ontario:
- District of Algoma
- District of Cochrane
- District of Kenora
- District of Manitoulin
- District of Nipissing
- District of Parry Sound
- District of Rainy River
- District of Sudbury together with the City of Greater Sudbury
- District of Thunder Bay
- District of Timiskaming
Southern Ontario:
- City of Kawartha Lakes
- County of Bruce
- County of Elgin together with the City of St. Thomas
- County of Essex together with the City of Windsor and Township of Pelee
- County of Frontenac together with the City of Kingston
- County of Grey
- County of Haliburton
- County of Hastings together with the City of Belleville and City of Quinte West
- County of Huron
- County of Lambton
- County of Lanark together with the Town of Smiths Falls
- County of Lennox and Addington
- County of Middlesex together with the City of London
- County of Northumberland
- County of Oxford
- County of Perth together with the City of Stratford and the Town of St. Marys
- County of Peterborough together with the City of Peterborough
- County of Prince Edward
- County of Renfrew together with the City of Pembroke
- District of Muskoka
- Municipality of Chatham‐Kent
- United Counties of Leeds and Grenville together with the City of Brockville, the Town of Gananoque and the Town of Prescott
- United Counties of Prescott and Russell
- United Counties of Stormont, Dundas and Glengarry together with the City of Cornwall
Disqualifications:
- Residential buildings are not eligible.
Description
This program offers your business a 10% refundable Corporate Income Tax credit. If you invest more than $50,000 in constructing, renovating, or acquiring eligible commercial and industrial buildings in certain regions, you can receive up to $45,000 in tax credits per year.
What you can use the credit for:
- Building new commercial or industrial spaces
- Renovating existing properties
- Acquiring eligible buildings
Temporary Enhancement: From March 24, 2021, to December 31, 2023, the credit is increased to 20% for expenditures between $50,000 and $500,000. This means you could receive up to $90,000 in tax credits per year during this period.
This program helps your business grow by reducing the cost of significant investments, making it easier to expand and create jobs. It's a great opportunity to boost your business while contributing to regional economic development.
Program Steps
Gather Required Documentation:
- Financial statements
- Business plan
- Proof of Canadian-controlled private corporation status
- Details of the qualifying investment (e.g., construction, renovation, or acquisition costs)
- Proof of permanent establishment in Ontario
- Documentation showing the property is in a designated region
Review Program Details:
- Understand the tax credit percentages (10% or 20% for the enhanced credit)
- Confirm the investment exceeds $50,000 and is within the $500,000 limit
- Ensure the property qualifies (commercial or industrial buildings in capital cost allowance classes 1 or 6)
Complete the Application Form:
- Fill out the application form provided by the Canada Revenue Agency (CRA)
- Include all necessary details about the qualifying investment and the designated region
Submit the Application:
- Submit the completed application form along with the gathered documentation through the CRA’s platform
- Ensure all information is accurate and complete to avoid delays
Wait for Review and Approval:
- The CRA will review your application to ensure it meets all criteria
- Be prepared to provide additional information if requested
Claim the Tax Credit:
- Upon approval, claim the tax credit on your T2 Corporation Income Tax return
- Ensure the credit is accurately reflected in your tax filings
Monitor and Maintain Records:
- Keep detailed records of all investments and documentation for future reference
- Be prepared for any audits or follow-up inquiries from the CRA