Third Session, 47th

General Assembly

63 Elizabeth II,

BILL 20

AN ACT TO AMEND THE INCOME TAX

ACT, 2000 NO. 2

Received and Read the First Time .................................................................................................

Second Reading .................................................................................................................................

Committee ..........................................................................................................................................

Third Reading .....................................................................................................................................

Royal Assent ......................................................................................................................................

HONOURABLE CHARLENE

JOHNSON

Minister of Finance

and President of Treasury Board

Ordered to be printed by

the Honourable House of Assembly

EXPLANATORY NOTE

This Bill would amend the Income Tax Act, 2000 to provide for a tax

credit in respect of a qualifying investment in a qualifying venture capital

fund.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000

NO. 2

Analysis

S.46.2 Added

Venture capital tax credit

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

SNL2000 cI-1.1

as amended

1. The Income

Tax Act, 2000 is amended by adding immediately after

section 46.1 the

following:

Venture capital

tax credit

46.2

(1) A

qualifying investor, or a person acting on behalf of a qualifying investor, may

apply to the minister for a tax credit in respect of a qualifying investment in

a qualifying venture capital fund.

(2) The minister may give a tax credit to a

qualifying investor who applies under subsection (1) or on whose behalf an

application is made under subsection (1).

(3) A tax credit given under subsection (2) shall

be calculated in the manner prescribed by the regulations.

(4) A tax credit shall be deducted against the tax

which is otherwise payable under this Act.

(5) The Lieutenant-Governor in Council may make

regulations

(

a) establishing the criteria for determining who

is a qualifying investor, what is a qualifying venture capital fund and what

investments are qualifying investments;

(

b) respecting the issuance of and the grounds for

revocation of certificates of qualification to qualifying venture capital funds;

(

c) limiting the amounts which a qualifying

venture capital fund may raise through the use of credits;

(

d) prescribing how funds raised may be used by a

qualifying venture capital fund;

(

e) respecting the wind-up and dissolution of a

qualifying venture capital fund;

(

f) respecting the manner of calculating the

amount of a tax credit that may be paid to a qualifying investor;

(

g) setting limits on the amounts of qualifying

investments;

(

h) respecting the carrying forward or back of a

credit;

(

i) respecting the holding period for a qualifying

investment;

(

j) prescribing penalties for failure to comply

with the regulations; and

(

k) generally to give effect to the purpose of

this section.

(6) This

section does not apply to

labour-sponsored venture capital tax credits referred to in

section 45.1.

Queen's Printer