Tax Credits: The Guide To Starting A Business In Ontario
Tax Credits are designed to encourage businesses to undertake activities that will have a positive economic effect in Canada. For all tax credit programs, it is essential to have all aspects of your claim well documented. This may be as simple as having formal employment contracts, or it may mean you need to record your hypothesis and the results of research and development (R&D) work.
This is a work in progress and a detailed listing of Tax Credit programs available for Startups, Scaleups, and beyond
Starting up in Ontario, if you are a small business, or a high growth startup TorontoStarts has you covered with The Guide to Starting A Business in Ontario A Resource Guide For Entrepreneurs, StartUPS, and ScaleUPS Ecosystem. From small business idea, to finding small business grants and loans, or startup angel investors or Venture Capital investors.
TorontoStarts is over 22,000 active entrepreneurs in the Greater Toronto Area strong. With over 120,000 followers on social and having hosted over 700 events we know the Toronto startups, entrepreneurs, and small business and what it takes to succeed and grow. We continue to put together the resources you need to connect, succeed and grow in Toronto
Where to Get Funds to Grow Your Business
Funding options for a start up...
- Personal Funds - high risk, requires strict financial discipline, depends on personal status
- Equity Investment (from VC, Angels, private, crowdfunding) - give up ownership, share dilution, increased number of stakeholders
- Loans (from Banks, mortgages, etc.) -Risk of cash-flow issues repaying the loan, interest rates, personal guarantees from directors
- Tax Credits (from federal government) - No risk of losing equity or raising debt, success base on eligibility
- Grants (government, private) - No risk of losing equity, success based on timing and eligibility
Tax Credits Vs Grants What's the Difference?
Tax Credits vs Grants
Virtually every grant program will go through a period where the number of applicants exceed available funding. At that point the program will select “winners” or chose those that have the most promise of providing benefits to Canada as well as fulfil the requirements of the program
Tax Credits
- Entitlement
- Reduces tax liability AFTER the fact
- Meet the requirements, get the money!
Grants
- Competitive
- Receive funds AS YOU GO
- Meet the requirements, get the money?
Scientific Research and Experimental Development (SR&ED) program
Co-operative Education Tax Credit (CETC)
Ontario Interactive Digital Media Tax Credit (OIDMTC)
Apprenticeship Tax Credits
Ontario transitional tax debits and credits
Ontario research and development tax credit (ORDTC)
Ontario business-research institute tax credit (OBRITC)
Ontario innovation tax credit (OITC)
