Nova Scotia Research and Development Tax Credit

The Nova Scotia Research and Development Tax Credit provides a fully refundable financing opportunity for corporations engaged in eligible scientific research activities within the province. This tax credit is designed to support and incentivize R&D investment without carryback or carryforward provisions.

• The credit is fully refundable at a rate of 15% of eligible expenditures.
• Eligible expenditures are reduced by any received government and non-government assistance, however, the credit itself does not affect the Nova Scotia tax otherwise payable.
• Recapture provisions apply, which may increase Nova Scotia tax liabilities if applicable.

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.

Who is eligible?

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.

Eligible geographic areas

This grant is available to companies with a permanent establishment in Nova Scotia. This geographical restriction ensures that scientific research is conducted within the province.

• Permanent establishment in Nova Scotia.

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