Small business venture capital tax credit

The small business venture capital tax credit is for individuals that invest in shares of a registered venture capital corporation or eligible business corporation.

The small business venture capital tax credit encourages investors to make equity capital investments in B.C. small businesses, in order to give small businesses access to early-stage venture capital to help them develop and grow.

Effective for the 2022 to 2024 calendar years, Budget 2022 proposes to increase the annual maximum venture capital tax credit from $38.5 million to $41 million. Budget 2022 also proposes to allocate this $2.5 million increase to investments made in clean technology businesses.

You may claim a tax credit in a tax year equal to the lesser of:

• The amount of the tax credit certificate issued by the administrator of the venture capital corporation or eligible business corporation programs
  during the tax year or within the first 60 days of the following year, or

• $120,000

The maximum small business venture capital tax credit that can be claimed for the 2018 and earlier years, or for investments made before February 20, 2019, is $60,000.

• Changes were also recently made to the venture capital tax credit program under the Small Business Venture Capital Act

Read more about the venture capital tax credit program as well as other investment capital programs.

Claiming the credit 

You claim the credit when you file your T1 Income Tax Return. Enter the amount of the credit you are claiming on lines 18, 19 or 20 (depending on when the purchase was made) of the British Columbia Credits form (BC479).

The small business venture capital tax credit for individuals is fully refundable, but must first be applied against total income tax payable. The tax credit is not refundable for corporations.

Unclaimed amounts of tax credit certificates may be carried forward for up to four years. 

Legislation

The following legislation applies to the small business venture capital tax credit:

• Income Tax Act (B.C.) Section 21
• Small Business Venture Capital Act 
• Small Business Venture Capital Regulation