Manitoba small business venture capital tax credit

You can claim this non-refundable tax credit if you are an eligible investor and you meet both of the following conditions:

• you are a corporation that is not a prescribed venture capital corporation or labour-sponsored venture capital corporation under Part LXVII of the federal regulations
• you made a direct investment of at least $10,000 in shares the province has approved as an eligible investment in an eligible small business corporation, as defined in the regulations. Before March 12, 2018, the minimum amount was $20,000.

An eligible small business corporation and its affiliates can have a maximum of 100 full-time equivalent employees for the immediately preceding calendar year or a maximum of $15 million in annual sales for the most recently completed fiscal period.

Eligible small businesses include ventures of commercial crop production in a climate-controlled environment and brew pubs.

For tax years ending after April 6, 2021, the credit is equal to 45% of the amount invested up to a lifetime maximum investment of $500,000 per company. The maximum amount of the tax credit that you can earn in a year is $225,000 per company. However, the maximum amount of the tax credit that you can apply against provincial tax in the year is $120,000, including any amounts carried back or carried forward.

 

For eligible shares issued before April 7, 2021, the credit is equal to 45% of the amount invested up to a lifetime and annual maximum investment of $450,000 per company. The yearly maximum applicable is $67,500. For eligible shares issued before June 12, 2014, the rate was 30% and the lifetime and annual maximum investment was $450,000. The yearly maximum applicable was $45,000.

This credit must be claimed against Manitoba tax otherwise payable. You can carry forward unused credits to the 10 following tax years or back to the 3 previous tax years.

The credit is now permanent.

Claiming the credit

File a completed Schedule 387, Manitoba small business venture capital tax credit. See the schedule for more details.

On line 608 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the credit you are claiming.

Supporting documents – The Province of Manitoba will issue a tax credit receipt for qualifying investments. If you file your T2 return electronically, keep your receipt in case the CRA asks for it later. Otherwise, file it with your paper T2 return.

Forms and publications

• Schedule 387, Manitoba small business venture capital tax credit
• Schedule 5, Tax Calculation Supplementary – Corporations

Government partners

• Manitoba Finance – Corporation Tax Credits
• Manitoba (provincial site)