Nova Scotia Budget Announcement - 2019

Nova Scotia Budget Announcement - 2019 NOVA SCOTIA BUDGET ANNOUNCEMENT - 2019 NOVA SCOTIA BUDGET HIGHLIGHTS On Tuesday, March 26, 2019, the Honourable Karen Casey, Minister of Finance and Treasury Board for Nova Scotia, tabled the province’s 2019 Budget, “Building on a Strong Foundation.” Budget 2019 delivers no new tax rate changes and projects a surplus of $33.6 million for 2019-20. 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 2019 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 2.0% $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 2019. The current top combined federal and Nova Scotia marginal rates for 2019 are as follows: Salary, business income, interest 54.00% Capital gains 27.00% Eligible dividends 41.58% Non-eligible dividends 48.27% New Innovation Equity Tax Credit As announced in Budget 2018, the province introduced a new, more narrowly focused Innovation Equity Tax Credit (IETC), effective January 1, 2019. Investors receiving the tax credit will provide the capital required for research, development, or commercialization of new technology, new products or new processes. In comparison to the Equity Tax Credit, investments are no longer restricted to common shares as preferred shares and convertible debentures are now eligible. The maximum investment limit for individuals has been raised to $250,000. The tax credit rate remains at 35 percent for investments in a broad range of sectors and there is a 45 percent tax credit rate available for investments in selected sectors in ocean technology and the life sciences. As a result, the maximum tax credit available has risen from $17,500 to between $87,500 (35 percent) and $112,500 (45 percent). The minimum hold period for investments has been reduced from five years to four years. The IETC is also available to corporations as of April 1, 2019. The tax credit rate for corporate investments is 15 percent to a maximum investment of $500,000. NOVA SCOTIA BUDGET ANNOUNCEMENT - 2019 Venture Capital Personal and Corporate Tax Credit Budget 2019 proposes to introduce a Venture Capital Tax Credit that will be available for both individual and corporate investors who invest in a venture capital corporation or fund. The tax credit rate will be 15 percent. This measure is effective April 1, 2019. Equity Tax Credit Phased Out As previously announced in Budget 2018, the current Equity Tax Credit will be phased out as of December 31, 2019. Applications from eligible corporations will be accepted until December 31, 2019. While the Equity Tax Credit will be phased out, there are no changes to the tax credit available for equity investments in Community Economic Development Investment Funds. NOVA SCOTIA BUDGET ANNOUNCEMENT - 2019 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 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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