New Small Business Tax Deduction
NS, Canada
Tax credit for newly incorporated Nova Scotia businesses
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|closingDateMay 17, 2024
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- grant_single|allIndustries
grant_single|grantors
- Finance and Treasury Board (NB)
- Government of Nova Scotia
grant_single|status
grant_card_status|closed
grant_single_labels|preview
This deduction eliminates the Nova Scotia corporate income tax for the first three taxation years of an eligible new small business after incorporation.
grant_single_labels|projects
This grant is specific to new small businesses that are established in Nova Scotia, Canada. Businesses must maintain a permanent establishment in Nova Scotia to qualify.
- Businesses located in Nova Scotia.
grant_single|admissibleProjectsExample
$15,000
Launching a community arts program for underprivileged youth
$35,000
Setting up a mobile farmers market to serve rural communities around Sydney
$40,000
Creating a coworking space for social enterprises
$50,000
Developing an app to connect freelance creatives with businesses
$30,000
Launching an eco-friendly clothing line using sustainable materials
grant_single_labels|admissibility
A business must meet the following criteria to be eligible for the New Small Business Tax Deduction:
- The business must qualify for the federal small business deduction for the applicable tax year.
- The business must have maintained a permanent establishment in Nova Scotia at any time during the tax year.
- The business must be a new Nova Scotia business.
- The business must have at least 2 employees, with at least 1 employee unrelated to any shareholder of the corporation.
- The business must not be in a partnership or joint venture with an ineligible corporation.
- The business must not be a beneficiary of a trust where any beneficiary is ineligible.
- The business must not be a previous active business with essentially the same owners or related owners.
- The business must not be a professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian, or chiropractor.
- The business must not carry on the same, or substantially the same, business activity it carried on as a sole proprietorship, partnership, or corporation.
grant_eligibility_criteria|who_can_apply
Eligible applicants must be new small businesses in Nova Scotia that qualify for the federal small business deduction, maintain a permanent establishment in the province, and are not involved in specified professional practices, partnerships, or previously active businesses with the same ownership.
grant_eligibility_criteria|who_cannot_apply
This grant excludes certain companies and industries based on their status and main activities. The outlined restrictions help ensure that the tax deduction is provided to strategic small business sectors in Nova Scotia.
- Businesses that are a professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian, or chiropractor.
- Corporations involved in partnerships or joint ventures with ineligible entities.
- Businesses that are beneficiaries of a trust where any beneficiary is ineligible.
- Companies that are essentially the same as previous active businesses with the same or related owners.
- Businesses carrying on the same, or substantially the same, business activity as a previous sole proprietorship, partnership, or corporation.
grant_eligibility_criteria|eligible_expenses
There are no specific projects or activities mentioned as eligible for this grant within the provided context. The grant focuses on eliminating provincial corporate income tax for certain qualifying new small businesses in Nova Scotia.
grant_eligibility_criteria|zone
The eligible geographic zone for this grant is Nova Scotia.
- Nova Scotia
grant_single_labels|criteria
The evaluation and selection of projects for this grant do not have specified criteria or point scores outlined in the provided context.
grant_single_labels|register
Here are the steps to submit an application for this grant:
- Step 1: File Corporate Income Tax Return
- File your corporate income tax return with the Canada Revenue Agency (CRA).
- Ensure that Schedule 341 is included with your filing.
- Step 2: Prepare Application Form
- Download the New Small Business Application form (pdf) from the official website.
- Complete the form with all necessary details including CRA Business Number, incorporation date, and shareholder information.
- Gather supporting documents: corporate income tax return for the relevant taxation year, including Schedule 341.
- Ensure that you have the signature of an authorized signing officer.
- Step 3: Calculate Employment and Payroll Data
- Compile total hours worked in the tax year by each employee unrelated to any shareholders.
- Calculate the percent of total wages and salaries paid to employees who are Nova Scotia residents.
- Step 4: Submit Application
- Email the completed application and supporting documents to the New Small Business Tax Deduction Administrator.
- Note: Paper applications will not be accepted.
- Step 5: Await Processing
- Wait approximately 5 weeks for the processing of your application.
- Be prepared to provide additional information if requested.
- Step 6: Adjust Corporate Income Tax Return
- Upon receiving your Eligibility Certificate, adjust your corporate income tax return to claim the New Small Business Tax Deduction.
grant_single_labels|otherInfo
This grant provides a corporate tax holiday for the first three years for eligible new small businesses, under specific conditions.
- You can apply for the grant at the end of each of your corporation's first 3 tax years or up to 3 years after your corporation's year end for the specified tax years.
- Applications will be processed sequentially, meaning you can't apply for the 2nd or 3rd year without submitting the previous years' applications.
- It takes about 5 weeks to process your application, but it can take longer if more information is needed or if forms are filled in incorrectly.
- Key documents needed include CRA Business Number, incorporation date, list of shareholders with their share percentages, and corporate income tax return including Schedule 341.
- The grant application must be submitted via email; paper applications are not accepted.
grant_single_labels|contact
Samantha.Thomson@novascotia.ca
902-424-5388
Apply to this program
Unlock Tax Relief for Your New Small Business in Nova Scotia
The New Small Business Tax Deduction provides provincial corporate income tax exemption for eligible new businesses in Nova Scotia during their first three taxation years. This initiative is designed to support economic growth by reducing the financial burden on emerging corporations.
Understanding the New Small Business Tax Deduction and Its Benefits
This vital tax deduction initiative by Nova Scotia is crafted to stimulate the growth of new small businesses by offering a substantial financial incentive in the form of a corporate tax holiday. By eliminating provincial corporate income tax for the first three operational years, eligible businesses can reinvest savings into their growth and innovation strategies, thus fostering a robust entrepreneurial environment within the province.
Navigating through the application process is straightforward if all eligibility conditions are met. Businesses must ensure they possess a permanent establishment in Nova Scotia and qualify for the federal small business deduction for the relevant tax period. In addition, they need to adhere to specific criteria such as having at least two employees, maintaining an independent business structure, and ensuring it is a genuinely new venture without substantial connections to previous business operations or professional practices that are expressly excluded from this tax incentive.
Applicants are required to methodically prepare their submissions at the close of each taxation year during the first three years since incorporation. Critical documents include corporate income tax returns, specifically Schedule 341, and an application form sent to the designated Tax Deduction Administrator via email. The focus on electronic submission aligns with modern administrative efficiency, facilitating quicker processing times and reducing paperwork hassles.
The processing of applications takes approximately five weeks, though meticulous adherence to the application criteria can expedite this timeline. Businesses must remain diligent in ensuring all required details are accurate and fully supported by their corporate documentation to prevent delays. Successfully obtaining the Eligibility Certificate grants businesses the ability to adjust their corporate tax returns, thereby actualizing the financial benefits under this deduction scheme.
Essentially, this tax deduction initiative not only provides immediate tax relief but also positions new businesses advantageously within the competitive economic landscape of Nova Scotia. By lowering initial operational costs, businesses can allocate resources to workforce expansion, equipment acquisition, or research development, ultimately enhancing their market viability and innovation capabilities.
Entrepreneurs in Nova Scotia can leverage this opportunity to solidify their business foundations through strategic financial planning and compliance with the specified application criteria. This structured support underscores Nova Scotia's commitment to fostering a dynamic business climate, helping new ventures thrive and contributing to the broader economic prosperity of the region.
The New Small Business Tax Deduction is a strategic tool intended to lower fiscal barriers, thus encouraging business formation and sustainability in Nova Scotia. It stands as a testament to the province's proactive approach to supporting small businesses and ensuring a nurturing environment for the growth of local entrepreneurship.
