Manitoba small business venture capital tax credit

You can claim this non-refundable tax credit if 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 directly invested a minimum of $10,000 before January 1, 2023, in a qualifying community enterprise, as defined in the regulations. Before March 12, 2018, the minimum amount was $20,000.

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

Manitoba small business venture capital tax credit
  Credit rate Yearly maximum earned Yearly maximum applicable Annual/lifetime investment limit
Shares issued after June 11, 2014 45% $202,500 $67,500 $450,000
Shares issued before June 12, 2014 30% $135,000 $45,000 $450,000

The credit is equal to 45% of the amount invested to a lifetime maximum investment of $450,000. For eligible shares issued before June 12, 2014, the rate was 30%.

The annual investment limit is also $450,000 and the maximum amount of the tax credit that you can earn in a given year is $202,500. However, the maximum amount of the tax credit that you can apply against provincial tax in the year is $67,500, including any amounts carried back or carried forward. For eligible shares issued before June 12, 2014, these last two amounts were respectively $135,000 and $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.

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 we ask for it later. Otherwise, file it with your paper T2 return.

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