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from CIT payable of 9% on taxable manufacturing and processing profits earned in the province.This results in an effective CIT rate of 5% for manufacturing and processing profits.DIRECT EQUITY TAX CREDIT PROGRAMThe Direct Equity Tax Credit Program is designed to encourage private investment in new orexpanding small businesses as a means of creating new jobs and diversifying the economy. Aninvestment credit, in the form of a provincial income tax credit, is available to individuals andarm’s length corporations that invest as shareholders in eligible small business activities. Thereare two tax credit rates. Where the qualifying activities are undertaken in the province outsidethe North East Avalon, a 35% rate applies. Where the qualifying activities are undertaken withinthe North East Avalon, a 20% rate applies. In cases where qualifying activities are undertaken inboth areas, a reasonable proration applies.FILM AND VIDEO TAX CREDITThis refundable provincial CIT credit is provided for eligible local film projects. The credit is 40%of eligible local labour costs, but may not exceed 25% of production costs or a singlecorporation credit limit of $3 million. The corporation must also pay at least 25% of its salariesand wages to residents of the province. The corporation must first apply for eligibility to theNewfoundland and Labrador Film Development Corporation prior to the commencement ofproduction.For further information on available tax incentives, contact:Department of FinanceTaxation and Fiscal Policy BranchP.O. Box 8700St. John’s, NL A1B 4J6Toll free: 1.800.729.6297Fax: 709.729.2856E-mail: taxpolicy@gov.nl.caMore information on Newfoundland and Labrador business incentives can be found at thefollowing website: http://www.fin.gov.nl.ca/fin/tax_programs_incentives/business/index.htmlBusiness Incentives 178