If you’re planning a major equipment purchase in Prince Edward Island, the Enriched Investment Tax Credit (EITC) can significantly reduce your after‑tax cost. Many PEI manufacturers don’t realize this credit is meant to be combined with the province’s main tax credit for investments—the Corporate Investment Tax Credit (CITC)—which increases the total benefit on the same investment. Knowing how these two tax credits work together can help your business save more on eligible investments.
According to Innovation PEI, the Enriched Investment Tax Credit was created specifically to complement the 10% Corporate Investment Tax Credit for qualifying capital investments.
The Enriched Investment Tax Credit is a provincial corporate income tax credit available to eligible PEI businesses that make qualifying capital investments. It does not replace the Corporate Investment Tax Credit. Instead, it adds extra value.
Here’s how the structure works in practice:
This credit has been in place for years and is the main tax credit for investments in PEI.
When both credits apply, your business can claim up to 25% of eligible capital costs as a provincial corporate income tax credit.
For example: A $400,000 investment in qualifying manufacturing equipment could generate up to $100,000 in PEI tax credits when both credits are applied.
Not every business that qualifies for the Corporate Investment Tax Credit will qualify for the Enriched Investment Tax Credit. The enriched portion has stricter eligibility requirements.
To access the Enriched Investment Tax Credit, your business must:
If your business does not meet these criteria, you may still qualify for the 10% Corporate Investment Tax Credit, but not the enriched portion.
Tools like GrantHub’s eligibility matcher can help you filter PEI tax credits by sector, export focus, and business profile in seconds.
The Enriched Investment Tax Credit follows the same core investment rules as the Corporate Investment Tax Credit, with a focus on productive capacity.
Eligible expenses generally include:
Important limitations:
Because the enriched credit applies to the same investment base, documentation must clearly support the full capital cost being claimed.
Both credits are applied against provincial corporate income tax payable.
Key details to know:
If your business is in an early growth phase and not yet profitable, the credits may still be valuable as they can offset taxes in future profitable years.
Assuming every CITC investment qualifies for the enriched rate
The extra 15% is limited to specific sectors and export‑focused businesses.
Buying used or leased equipment
Used assets generally do not qualify for the Enriched Investment Tax Credit.
Ignoring provincial debt status
A default listed in PEI’s Central Default Registry can make your business ineligible.
Waiting until after purchase to check eligibility
Some projects require pre‑approval or confirmation from Innovation PEI.
Q: What is the total value when both credits are combined?
When combined, the Enriched Investment Tax Credit and Corporate Investment Tax Credit can provide a combined 25% provincial tax credit on eligible capital investments.
Q: Is the Enriched Investment Tax Credit refundable?
No. The credit is applied against future PEI corporate income taxes payable, rather than paid out as cash.
Q: Can used equipment qualify for the enriched portion?
Generally no. Eligible equipment must usually be new and not previously used or leased.
Q: Do service‑based businesses qualify?
Only if they develop exportable goods or services and operate in an approved strategic sector. Most local service businesses do not qualify.
Q: Do I apply separately for the enriched credit?
Yes. The Enriched Investment Tax Credit is administered by Innovation PEI and requires assessment beyond standard tax filings.
After the FAQs: GrantHub tracks hundreds of active grant and tax credit programs across Canada — including PEI investment incentives — so you can quickly see which ones match your business profile.
If your business is planning a capital investment in PEI, understanding how the Enriched Investment Tax Credit works with the Corporate Investment Tax Credit should be part of your planning process. The right structure can reduce your tax burden by up to one‑quarter of eligible costs.
To go further, explore related guidance like What Expenses Are Eligible Under Equity Investment Incentive Programs in PEI? and Tax Credits vs Grants for Employee Training in British Columbia. GrantHub helps you compare tax credits, grants, and incentives so you can make informed funding decisions before you invest.
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