Nova Scotia Budget Announcement - 2018 NOVA SCOTIA BUDGET ANNOUNCEMENT - 2018 NOVA SCOTIA BUDGET HIGHLIGHTS On Tuesday, March 20, 2018, the Honourable Karen Casey, Minister of Finance and Treasury Board for Nova Scotia, tabled the province’s 2018 Budget. Presented as Stronger Services and Supports, Budget 2018 delivers no new tax increases and projects a surplus of $29.4 million for 2018-19. The following are highlights of the tax measures announced: A. Corporate Tax Measures Corporate Tax Rates No new corporate income tax rate changes have been announced in this year’s Budget. The current corporate income tax rates for 2018 are as follows: Small Business Rate General Rate Rate Threshold Non M&P M&P Federal 10.0% $500,000 15.0% 15.0% Nova Scotia 3.0% $500,000 16.0% 16.0% B. Personal Tax Measures Personal Tax Rates No new personal income tax rate changes have been announced in this year’s Budget. The top marginal personal income tax rate for Nova Scotia is 21 percent for 2018. The current top combined federal and Nova Scotia marginal rates for 2018 are as follows: Salary, business income, interest 54.00% Capital gains 27.00% Eligible dividends 41.58% Non-eligible dividends 47.33% Enhancement of the Basic Personal Amount, Spousal Amount, Dependant Amount and Age Amount As announced in Budget 2017 and reaffirmed in Budget 2018, Nova Scotia will increase the Basic Personal Amount, the Spousal Amount, and the Amount for an Eligible Dependant by $3,000, from $8,481 to $11,481 for the 2018 taxation year and subsequent taxation years. The $3,000 increase to these non-refundable tax credits will apply to all tax filers who have taxable income of less than $25,000. For tax filers who have taxable income between $25,000 and $75,000, the enhanced benefit will be reduced at a rate of six cents for every dollar of taxable income above $25,000. Tax filers with over $75,000 of taxable income will not receive a benefit from this enhancement. Another measure announced in Budget 2017 and reaffirmed in Budget 2018 is the increase to the Age Amount non-refundable tax credit to $5,606 (from $4,141) for 2018 and subsequent taxation years. Similar to the mechanism described above, the full enhancement will be available for tax filers with taxable income of less than $25,000 and will be phased out between taxable incomes of $25,000 and $75,000. NOVA SCOTIA BUDGET ANNOUNCEMENT - 2018 Removal of Maximum for Medical Expenses Tax Credit for Dependent Nova Scotia is removing the $10,000 maximum on eligible medical expenses that can be claimed for a financially dependant relative. Accordingly, an individual may claim eligible medical expenses that exceed the lesser of 3 percent of their income or $1,637 without having to apply a maximum claim if they were claimed on behalf of a financially dependent relative. A dependant relative is defined as a child who is 18 years of age or older, or a grandchild, parent, grandparent, brother, sister, uncle, aunt, niece, or nephew who is dependent on the taxpayer for support. New Innovation Equity Tax Credit The province announced its intention to introduce a new, more narrowly focused, Innovation Equity Tax Credit, beginning January 1, 2019. The existing equity tax credit was designed to assist Nova Scotia small businesses, co-operatives and community economic development initiatives in obtaining equity financing by offering a personal income tax credit to individuals investing in eligible businesses. It will be phased out over time. C. Other Tax Measures Cannabis Tax In December 2017, the province agreed in principle to enter into a coordinated cannabis tax framework with the Government of Canada for a two-year period following the legalization of recreational cannabis. The federal government will impose a federal excise duty of $0.25 per gram of flowering material in a cannabis product and will collect a $0.75 per gram additional duty on behalf of the province. The duties are payable once the cannabis product is packaged for sale and ready for delivery to a provincially authorized retailer of non-medical cannabis or an individual purchasing medical cannabis. NOVA SCOTIA BUDGET ANNOUNCEMENT - 2018 ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world. Atlantic Canada Region Contacts HALIFAX Jerry Inman T: 902.493.5464 Robert Dean T: 902.493.5496 Earl MacLeod T: 902.493.5468 Bill Vienneau T: 902.493.5466 TRURO Greg Mosher T: 902.896.2575 Visit us at MNP.ca Praxity AISBL is a global alliance of independent firms. Organised as an international not-for-profit entity under Belgium law, Praxity has its executive office in Epsom. Praxity – Global Alliance Limited is a not-for-profit company registered in England and Wales, limited by guarantee, and has its registered office in England. As an Alliance, Praxity does not practice the profession of public accountancy or provide audit, tax, consulting or other professional services of any type to third parties. The Alliance does not constitute a joint venture, partnership or network between participating firms. Because the Alliance firms are independent, Praxity does not guarantee the services or the quality of services provided by participating firms. Next >

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