The Small Business Venture Capital Program offers tax credits to investors to encourage them to make equity capital investments in B.C.-based small businesses.
The government recognizes that creating new small businesses and expanding existing ones will contribute to a healthy economy. These programs give small business continuous access to early stage venture capital to help them develop and expand.
B.C. investors receive a 30% tax credit on their investment in a venture capital corporation (VCC) or an eligible business corporation (EBC).
2023 Tax Budget Year
The 2023 tax budget year started on January 1, 2023 and ends December 31, 2023.
VCCs and EBCs planning to raise tax credit supported investment require a 2023 equity authorization.
Tax credit budgets are limited. EBCs and VCCs can only raise tax credit supported investment up to the authorized amount, between the dates stated in their Equity Authorization approval letter.
EBCs and VCCs should claim tax credits on behalf of investors through the eTCA system soon after investment has been raised, and investors have completed Share Purchase Reports.
2023 and 2024 Tax Credit Certificates
To ensure that all investors who invested in a registered business receive a tax credit, we have changed the way we manage our tax credit budgets. As a result, those investors who invested during calendar 2023 will receive a tax credit certificate with a Taxation Year of 2023 listed on the certificate. This refers to the tax budget year a tax credit was claimed in.
Individual investors who invested in the first 60 days of the calendar year – from January 1 to February 29, 2024 will receive a tax credit certificate with a Taxation Year of 2024.
The Canada Revenue Agency (CRA) uses the Investment Date on the certificate to determine if the tax credit can be applied to the previous year’s tax return.
Therefore, an individual investor who receives a tax credit certificate with the Taxation Year of 2024, and where the certificate’s Investment Date is between January 1 to February 29, 2024, can elect to claim the tax credit when filing their 2023 tax return.
Budget 2019 changes to the Venture Capital Programs
Convertible Right (SAFE) Instrument Policy Statement
As part of Budget 2019, “convertible right” (i.e. Simple Agreement for Future Equity, or “SAFE”) was added to the definition of “equity share” under the Small Business Venture Capital Act.
Tax Credit Application Certification
The Tax Credit Application Certification are the terms and conditions the EBC/VCC certifies when entering an investment through the electronic Tax Credit Application system (eTCA).
Service Costs Associated with the Export of Goods or Technology
The following policy statement defines the "service costs" that are acceptable "activity costs" when a small business is involved in the export of goods or technology.
How to submit an EBC registration application
To register an EBC with the Venture Capital Tax Credit Program the following registration application documents are required:
The following registration application documents are required:
EBCs are encouraged to submit the Registration Application and required attachments online via the electronic Tax Credit Application (eTCA) system. Alternately, a completed Registration Application (PDF, 680 KB) form and required attachments may be submitted electronically to the Venture Capital Tax Credit Program at InvestmentCapital@gov.bc.ca.
How to submit a VCC registration application
VCCs are encouraged to submit the Registration Application and required attachments online via the electronic Tax Credit Application (eTCA) system. Alternately, the Registration Application (PDF, 746 KB) form and all required attachments may be submitted electronically to their Portfolio Manager or to the Venture Capital Tax Credit Program at InvestmentCapital@gov.bc.ca.
VCC registration information can be found on the Venture Capital Corporation Registration page.
Small Business Support Information
The document available in the link below contains information on government and non-government support programs and other resources that are available to British Columbia's small businesses.