The process for determining the investment tax credits for the taxation year can be quite complex but generally there is a 4 step process:
- Determine the eligible expenditures.
- Decide on an overhead method to calculate the total qualifying expenditures.
- Calculate the rate of return.
- Combine the provincial and federal ITCs to calculate the total ITCs earned.
We will talk about each of these steps at a high level and then finish up with a case study.