What is the NB Small Business Tax Investor Credit?
The New Brunswick Small Business Investor Tax Credit is a 30% non-refundable personal income tax credit of up to $75,000 per year (for investments of up to $250,000 per investor) to eligible investors who invest in eligible small businesses in the province. The New Brunswick Small Business Investor Tax Credit Program started August 1st, 2003.
CFIB played an integral part in helping develop the NB Small Business Investor Tax Credit, thanks to the suggestion of a member. It is a perfect example of how you, a member, can make effective changes.
- Provide an important source of capital by increasing access to equity financing for New Brunswick small businesses.
- Encourage investment by New Brunswick residents in New Brunswick small businesses.
The program has a two-stage process: application for a Certificate of Registration, followed by application for a Tax Credit Certificate.
Corporations that want to take advantage of the program and are approved to sell shares in New Brunswick will file an application with the New Brunswick Department of Finance on a form provided by the provincial Minister of Finance.
One of the requirements will be the submission of an investment plan that outlines the proposed use of the capital. The application will be approved if the Minister of Finance is satisfied that specific conditions are met, including:
- the corporation meets Corporation Eligibility Criteria
- the proposed investment plan complies with the spirit and intent of the Small Business Investor Tax Credit Act and the Regulations, and
- the proposed use of the capital to be raised, as set out in the investment plan, would benefit the operations of the corporation located in New Brunswick.
The Department of Finance will issue a Certificate of Registration to a business approved to take part in the program. The certificate will permit the business to issue eligible shares up to a specified value on or before a specified date.
Under the program, approved businesses have 90 days, from their approval date, to finalize the sale of the shares to the investors included in the investment plan.
Disclaimer: The Province of New Brunswick does not guarantee the value of any shares issued by a corporation registered under the Small Business Investor Tax Credit Act and does not express any opinions as to the financial condition of such corporations or the merits of investing in the shares of such corporations.
Within 30 days of when eligible shares are sold, the business must provide proof of sale, along with required information on each investor, to the New Brunswick Department of Finance on a form provided by the provincial Minister of Finance. The Minister of Finance will issue a Tax Credit Certificate to eligible investors on approved purchases of shares.
Individual investors will attach these certificates to their personal income tax returns to obtain the reduction in provincial income tax payable.
Need more information?
To find out the eligible business sectors, corporate eligibility criteria, investor eligibility, investment eligibility, prohibitive use of capital raised, and frequently asked questions visit the Small Business Investor Tax Credit website.
Where can I get application forms and additional information about the Small Business Investor Tax Credit program, including the act and regulations governing it?
Telephone: (506) 453-2404
Fax: (506) 444-5086
Small Business Investor Tax Credit Program
Department of Finance
670 King St.,
P.O. Box 3000,
Fredericton, NB E3B 5G5
Of course, you can always call CFIB's Business Resource Counsellor at 1-888-234-2232 or email us at email@example.com. We will be happy to answer your questions. We are here to help!