Enhanced Ontario Regional Opportunities Investment Tax Credit

Important Upcoming Deadline

In March 2020, the Regional Opportunities Investment Tax Credit (“ROITC”) was introduced to help support business investment, economic growth, and job creation in designated regions of Ontario.

The ROITC is a refundable tax credit available to Canadian-controlled private corporations that have a permanent establishment in Ontario and that incur expenditures to acquire, construct, or renovate a commercial or industrial building in designated regions of Ontario.

These expenditures must exceed $50,000, up to a maximum of $500,000. In addition, the property must become available for use in the taxation year. Only one corporation in an associated group can claim the tax credit in a given taxation year.

The ROITC rate is 10%, which results in a maximum refundable tax credit of $45,000 per year.

However, in 2021, a temporary enhancement to the ROITC was announced to provide an additional 10% credit, resulting in a total ROITC refundable tax credit rate of 20%. Therefore, currently the maximum amount of the refundable credit under the temporary enhancement is $90,000 per year.

This enhanced ROITC is only available for eligible investments that are acquired and become available for use by December 31, 2023. As of January 1, 2024, the maximum refundable credit available for eligible expenditures will drop back to $45,000.

Ontario business owners currently in the market for a commercial or industrial building should consider whether the acquisition can be finalized by December 31, 2023 to maximize the potential refundable tax credit.

For more information with respect to the Ontario ROITC, including details with respect to qualifying regions and excluded areas, please see the Ontario Technical Bulletin.

Please contact your Welch LLP advisor to discuss your potential eligibility for the Ontario ROITC.

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