Nova Scotia Research and Development Tax Credit
NS, Canada
Tax credit for R&D in Nova Scotia
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grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|closingDateMay 17, 2024
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Tax Credits
grant_single|eligibleIndustries
- Professional, scientific and technical services
grant_single|grantors
- Finance and Treasury Board (NB)
- Government of Nova Scotia
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Tax credit of 15% for qualified scientific research and experimental development expenditures in Nova Scotia.
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This tax credit is available to corporations with a permanent establishment in Nova Scotia, underlining its focus on fostering research and development within the province. The geographical eligibility is specific to ensure the development and retention of R&D activities within Nova Scotia.
- Corporations with a permanent establishment in Nova Scotia.
grant_single|admissibleProjectsExample
$37,500
Applying machine learning for predictive analytics in healthcare to improve patient outcomes and efficiencies
$22,500
Conducting basic research on marine biodiversity to advance scientific knowledge about ocean ecosystems
$26,250
Creating an AI-driven platform to enhance crop yield prediction and management for local farmers
$30,000
Developing an energy-efficient solar panel prototype to advance renewable energy technologies
$45,000
Developing a modular water purification system using advanced nanotechnology to improve sustainability
$33,000
Developing a wearable health-monitoring device with real-time data analytics for personalized health insights
grant_single_labels|admissibility
Eligibility for this grant is determined by specific requirements related to the corporation’s setup and location.
- The applicant must be a corporation, a corporation that is a beneficiary of a trust, or a corporation that is a member of a partnership.
- The corporation must have a permanent establishment in Nova Scotia.
- The scientific research must be carried out within the province of Nova Scotia.
grant_eligibility_criteria|who_can_apply
Corporations, corporations that are beneficiaries of a trust, and corporations that are members of a partnership, with a permanent establishment in Nova Scotia, for scientific research carried out in this province.
grant_eligibility_criteria|eligible_expenses
The Nova Scotia R&D tax credit facilitates investments in scientific research and experimental development within the province. Eligible projects typically involve innovation and technological advancements harnessing scientific methodologies.
- Scientific research leading to new or improved products, processes, or technologies.
- Experimental development to address technical challenges and achieve technical advancement.
- Projects that align with the criteria set for SR&ED investment tax credit at a federal level.
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The Nova Scotia R&D tax credit covers specific expenditures eligible for the federal SR&ED investment tax credit.
- Wages of employees directly engaged in R&D activities.
- Cost of materials consumed or transformed in the R&D process.
- Lease costs, and overhead expenditures related to R&D work.
- Payments to third-party contractors for R&D services.
- Utilities and supplies directly used in R&D projects.
- Prototyping or samples created during R&D activities.
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Here are the steps to submit an application for the Nova Scotia R&D tax credit:
- Step 1: Determine Eligibility
- Confirm that your corporation has a permanent establishment in Nova Scotia.
- Ensure your expenditures qualify for the federal SR&ED investment tax credit.
- Step 2: Prepare Required Documentation
- Compile records of eligible R&D expenditures.
- Ensure you have documentation to support the scientific research conducted.
- Review Section 41 of the Income Tax Act (Nova Scotia) for specific legislative requirements.
- Step 3: Complete Form T2SCH340
- Download and complete the T2SCH340 form, Nova Scotia Research and Development Tax Credit.
- Provide accurate details of R&D activities and expenditures on the form.
- Step 4: Submission with Corporate Tax Return
- Attach the completed T2SCH340 to the corporation’s income tax return (T2) filing.
- File the tax return with the Canada Revenue Agency within 18 months of your corporation's tax year-end.
- Step 5: Retain Documentation
- Keep copies of all submitted forms and supporting documents for your records.
- Be prepared for any follow-up or audit requests from the CRA regarding claimed expenditures.
grant_single_labels|otherInfo
The Nova Scotia R&D tax credit is designed to support corporations in Nova Scotia with eligible scientific research and development expenditures. The tax credit follows specific eligibility criteria and deadlines for filing, with implications on federal deductions.
- Administered by the Canada Revenue Agency
- Fully refundable at a rate of 15% of eligible expenditures
- Available to corporations, including those that are beneficiaries of a trust or members of a partnership with a permanent establishment in Nova Scotia
- Eligible expenditures need to qualify for federal SR&ED investment tax credit
- Filing deadline: 18 months after the corporation's tax year-end
- Carryback/carryforward: Not applicable
- Eligible expenditures are reduced by other forms of government and non-government assistance
- The credit reduces the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures
- Recapture of the credit will increase Nova Scotia tax otherwise payable
- Ability to renounce: On or before six months after the corporation's tax year-end
- Filing form: T2SCH340, Nova Scotia Research and Development Tax Credit
- Legislation: Section 41 of the Income Tax Act (Nova Scotia)
- Provincial website: Nova Scotia – Research and Development Tax Credit
Apply to this program
Enhancing Research and Development in Nova Scotia
The Nova Scotia R&D tax credit offers financial incentives to corporations undertaking scientific research within the province. It provides a refundable tax credit on eligible expenses to support innovation and technological advancement.
Understanding the Nova Scotia R&D Tax Credit: Benefits and Applications
The Nova Scotia Research and Development (R&D) Tax Credit is a strategic initiative designed to incentivize and support corporations engaged in scientific research and experimental development. Administered by the Canada Revenue Agency, this tax credit is distinct in its offer of a fully refundable 15% credit on eligible expenditures, fostering an innovation-friendly environment in Nova Scotia. By reducing financial barriers for corporations with a permanent establishment carrying out scientific research, the program aims to boost economic growth through technological advancements.
Corporations eligible for this credit must meet specific criteria as outlined in conjunction with the federal Scientific Research and Experimental Development (SR&ED) investment tax credit. The eligible expenditures include costs that qualify under the federal scheme, ensuring alignment and streamlined processes for claimants. This design ensures that corporations already familiar with the federal SR&ED credits find a congruent structure within the Nova Scotia program, facilitating ease of application and integration of benefits.
The filing deadline for these credits is set at 18 months after the corporation’s tax year-end, providing ample time for companies to gather and prepare necessary documentation for submission. It should be noted, however, that there is no provision for carryback or carryforward of this credit, which underscores the importance of timely filing and strategic financial planning for corporations considering this credit option.
Moreover, the Nova Scotia R&D tax credit necessitates a recalibration of eligible expenditures as government and non-government assistance received by the corporation will reduce the pool of eligible expenditures. However, these deductions do not apply to the actual Nova Scotia R&D tax credit, preserving the benefit for the claimant. It is essential for claimants to be aware that taking advantage of this credit will result in a diminished federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures, necessitating strategic financial considerations.
A recapture mechanism is in place, where any recapture will create or increase Nova Scotia tax otherwise payable, ensuring that proper usage of funds is observed and discrepancies are accounted for in the form of tax adjustments. Companies need to be vigilant about maintaining compliance with these terms to avoid unanticipated tax liabilities.
Corporations also have the option to renounce the credit within six months after their tax year-end should they find it beneficial to do so, allowing for flexibility in tax planning. This option requires careful assessment of the corporation’s current and projected financial scenario to ensure that such a decision maximizes overall tax efficacy.
Utilizing Form T2SCH340, entities can formally apply for the Nova Scotia R&D Tax Credit within the framework established by Section 41 of the Income Tax Act (Nova Scotia). Aligning with provincial legislation requirements ensures transparency and accountability, bolstering confidence in the fiscal benefits gained through the program.
Corporations engaged in scientific research and aiming to claim this credit must understand its strategic potential in offsetting costs related to innovation and experimentation. The financial reprieve offered through refundable tax credits presents an opportunity to re-invest savings into further research initiatives, cultivating a culture of innovation and technological progression in the province.
