Enhancing the Regional Opportunities Investment Tax Credit
April 21, 2021
By Bob Peters
Cornwall Ontario – The 2021 Ontario Budget is proposing to temporarily double the Regional Opportunities Investment Tax Credit rate.
The Regional Opportunities Investment Tax Credit is a 10% refundable Corporate Income Tax credit for corporations that invest more than $50,000 to construct, renovate or acquire eligible commercial and industrial buildings in Cornwall and the surrounding region. The Regional Opportunities Investment Tax Credit will:
- help address regional disparities by bringing greater opportunities and prosperity to businesses, workers and families in these communities
- help attract investments, boost growth and create jobs by supporting businesses, including those that are recovering from COVID-19covid 19, to expand and grow
Ontario is proposing to temporarily double the Regional Opportunities Investment Tax Credit rate. The proposed enhancement would allow corporations to claim a 20 per cent credit.
Who is eligible
To be eligible, a corporation must:
- be a Canadian-controlled private corporation throughout the tax year
- have a permanent establishment in Ontario at the time a qualifying investment is made
- make a qualifying investment in a designated region of the province
The corporation can be located anywhere in Ontario, but the investment must be made in a designated region to qualify for the tax credit.
Corporations must invest more than $50,000 to qualify and may receive a tax credit of up to $45,000 in respect of its qualifying investments in a year. The tax credit amount applies to expenditures in excess of $50,000 up to a maximum of $500,000.
To qualify for the tax credit, investments must:
- be used to acquire, construct or renovate an eligible property in a designated region
- become available for use on or after March 25, 2020 and in the taxation year in which the tax credit is being claimed
Eligible properties are:
- commercial or industrial buildings (or other structures) that are included in capital cost allowance classes 1 or 6 for income tax purposes
- located in a designated region
Residential buildings are not eligible.
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