Venture Capital Program
The Venture Capital Tax Credit Program has been very popular this year. EBCs/VCCs that have raised investment during 2021 should not delay and submit claims for tax credits right away.
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).
2021 Tax Budget Year
The 2021 tax budget year started on January 1, 2021 and ends December 31, 2021.
VCCs and EBCs planning to raise tax credit supported investment require a 2021 equity authorization.
Tax credit budgets are limited. VCCs and EBCs are encouraged to claim tax credits as soon as possible after raising investment.
2020 and 2021 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 2020 will receive a tax credit certificate with a Taxation Year of 2020 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 March 1, 2021 will receive a tax credit certificate with a Taxation Year of 2021.
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 2021, and where the certificate’s Investment Date is between January 1 to March 1, 2021, can elect to claim the tax credit when filing their 2020 tax return.
Budget 2019 changes to the Venture Capital Programs
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.
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).
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.
If you have contacted the Investment Capital Branch and spoken with a Portfolio Manager regarding applying to register an EBC with the Venture Capital Tax Credit Program you can PDF the required registration application documents and email them to the Portfolio Manager. Alternately, you can email the documents to the branch at InvestmentCapital@gov.bc.ca.
The following registration application documents are required:
- A completed EBC Registration Application (PDF, 680 KB)
- Business plan or executive summary of business plan
- Central securities register showing $25,000 in equity capital
How to submit a VCC registration application
If you have contacted the Investment Capital Branch and spoken with a Portfolio Manager regarding applying to register a VCC with the Venture Capital Tax Credit Program you can PDF the required registration application documents and email them to the Portfolio Manager. Alternately, you can email the documents to the branch at InvestmentCapital@gov.bc.ca.
VCC registration information can be found on the Venture Capital Corporation Registration page.