Newfoundland and Labrador green technology tax credit

• Provides a tax credit equal to 20% of the capital cost of eligible equipment, up to a maximum of $1 million annually per corporation.
• Up to 40% of the credit amount can be refunded if it is not applied to reduce provincial tax payable.
• Unused credits may be carried forward for up to 20 years or carried back for up to 3 years, but not to any taxation year that ends before April 7, 2022.

• The applicant must be a Canadian-controlled private corporation (CCPC).
• The corporation must have a permanent establishment in Newfoundland and Labrador.
• The project must involve the acquisition of eligible equipment that generates or conserves renewable energy, uses fuels from waste, or improves fossil fuel efficiency.
• The eligible equipment must be located in Newfoundland and Labrador and used in the course of business in the province.
• The equipment must qualify as capital property under Class 43.1 or 43.2 of the federal Income Tax Act.

Who is eligible?

• Canadian-controlled private corporations (CCPCs) with a permanent establishment in Newfoundland and Labrador

Eligible expenses

• Capital cost of equipment that generates or conserves renewable-source energy.
• Capital cost of equipment that uses fuels from waste.
• Capital cost of equipment that makes efficient use of fossil fuels.

Eligible geographic areas

• Newfoundland and Labrador

• Step 1: Acquire Eligible EquipmentInvest in equipment that qualifies under Class 43.1 or 43.2 of the federal income tax act and ensure it is located and used in Newfoundland and Labrador.
• Step 2: Prepare Tax DocumentationCalculate the capital cost of the eligible property to determine the credit amount (20% of capital cost, up to a maximum annual credit of $1 million).
• Gather all purchase documentation and asset classification supporting documents.
• Step 3: Complete Corporate Income Tax ReturnReport the Green Technology Tax Credit on the corporation’s Newfoundland and Labrador income tax return.
• Apply the credit to reduce provincial tax otherwise payable.
• If applicable, claim a refund for up to 40% of the total credit amount not used to reduce taxes payable.
• Step 4: Submit Application with Tax ReturnSubmit your completed corporate income tax return including all relevant schedules and supporting documentation to the provincial tax authorities.
• Step 5: Track Unused CreditsIf there are unused credits, keep records for possible application to prior three or next twenty tax years (cannot apply to years before April 7, 2022).

• The maximum annual credit per corporation is $1 million, with up to 40% of that amount eligible for refund.
• The credit can be carried back three years or forward up to twenty years, but not to a tax year ending before April 7, 2022.
• Questions regarding Class 43.1 or 43.2 property should be directed to the Canada Revenue Agency or referenced in the Natural Resources Canada technical guide.