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.
Example:
Assume three separate CCPCs, identical except for the amount of Newfoundland and Labrador tax otherwise payable, each acquire class 43.1 or 43.2 with a capital cost of $150,000. This provides a GTTC of $30,000 ($150,000 X 20%) with a maximum refundable amount of $12,000 ($30,000 X 40%)
| CORP A | CORP B | CORP C | |
| Newfoundland and Labrador tax payable | $8,000 | $10,000 | $20,000 |
| GTTC applied | 8,000 | 10,000 | 20,000 |
| Refundable | 12,000 | 12,000 | 10,000 |
| Available to Carry forward/back | 10,000 | 8,000 | 0 |
The Federal Government determines the capital cost allowance treatment for capital assets. The Canada Revenue Agency (CRA) can answer your questions regarding property included in Class 43.1 or class 43.2. You can contact them at 1-800-959-5525. Additional information can be obtained from the Natural Resources Canada website
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