Via Budget 2022, the Government of Newfoundland and Labrador is introducing a new 20 percent green technology tax credit for Canadian-controlled private corporations that invest in equipment for energy conservation and clean energy generation, use fuels from waste, or make efficient use of fossil fuels. The maximum credit is $1 million annually, of which up to 40 per cent is refundable.

From the Department of Finance website:

Canadian Controlled Private Corporations (CCPC’s) that invest in equipment that generates or conserves renewable-source energy, uses fuels from waste, or makes efficient use of fossil fuels may be entitled to a credit equal to 20% of the capital cost of that equipment.

Eligibility:

• Corporations with a permanent establishment in Newfoundland and Labrador
• Property eligible to be included as capital property of Class 43.1 or 43.2 under the federal income tax act that is;
  • Located in Newfoundland and Labrador
  • Acquired for use in the course of a business operating in Newfoundland and Labrador

How to apply

The GTTC will be the applied to reduce provincial tax otherwise payable, or refunded on the corporation’s income tax return.

Refundable

Corporations may be able to receive a refund of any amount not applied to reduce tax payable, up to 40% of the total GTTC.

Carry forward/back

Any GTTC not applied or refunded in the current taxation year may be applied to reduce Newfoundland and Labrador tax payable in any of the next 20 years, or any of the preceding three years, but cannot be applied to a taxation year that ends before April 7, 2022.

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