Taxation Info-Guide

This Info-Guide is a document designed to help you navigate through the different government programs, services and regulations which deal with taxation for business, and identify those of interest. The selected items provide a helpful overview. This list is not exhaustive. Further information on each item can be obtained by contacting the organization directly or by contacting the Canada/Nova Scotia Business Service Centre at 426-8604 or 1-800-668-1010 or visiting our Web site;http://www.cbsc.org/ns .

CONTENTS

1. General Business Taxation
2. Specific Taxation Issues
3. Tax Credits
4. Additional Info-Guides

1. GENERAL BUSINESS TAXATION

HST

You must register for and charge HST if:

• you sell or provide taxable goods or services in your commercial activities in Canada and your total taxable revenues were more than $30,000 in the immediately preceding four consecutive calendar quarters, or exceed $30,000 in a single calendar quarter.
• you drive a taxicab or limousine.

If your sales do not exceed $30,000 after 4 consecutive quarters, you do not need to register, nor charge HST.

There may be instances when registering voluntarily (or before the $30,000 threshold) can give you certain advantages, such as the right to claim the HST you pay on your business's start-up expenses from the time you register. For more information, contact your Canada Revenue Agency Office (see below) or obtain a copy of Canada Revenue Agency's publications:

General Information for GST/HST Registrants http://www.cra.gc.ca/E/pub/gp/rc4022/
Guide for Canadian Small Businesses http://www.cra-arc.gc.ca/E/pub/tg/rc4070/

If you wish to register for the HST, you need a Business Number (BN ). If you have recently registered your company name at the Registry of Joint Stocks, you will already have a BN. If not, just contact your nearest Canada Revenue Agency Business Window and explain that you want to register for the HST. You will be provided with a Business Number application form, or you can register over the telephone. BN applications are also available at the Canada/Nova Scotia Business Service Centre.

For more information, contact the Canada Revenue Agency Business Window at 1-800-959-5525.

IncomeTax

You have to report your business income on an annual basis. Business income includes money you earn from a profession, a trade, manufacturing or undertaking of any kind , and an adventure or concern in the nature of trade or any other activity you carry on for profit or with a reasonable expectation of profit. If you are a sole proprietor or a member of a partnership, you can obtain income tax information from Canada Revenue Agency's publication: Business and Professional Income. This publication will also give you an overview of the types of business expenses you can claim. Different rules apply to incorporated companies. Canada Revenue Agency's publication called T2 Corporation Income Tax Guide has more details on the filing requirements for corporations.

For more information, contact the Canada Revenue Agency Business Window at 1-800-959-5525.
Visit the Web site: http://www.cra.gc.ca/E/pub/tg/t4002/README.html

Municipal Taxation

If you are a tenant or property owner who occupies or uses commercial space, you will be assessed for business occupancy tax. There are 55 municipal units in Nova Scotia, each with its own individual tax rate. Businesses in each municipality pay a Business Occupancy Tax based on an assessment made by the Nova Scotia Department of Housing and Municipal Affairs.

For more information, contact the assessment office closest to you -- please consult the blues pages of your telephone book under the provincial department of Housing and Municipal Affairs - Assessment.
Visit the Web site: http://www.gov.ns.ca/snsmr/asmt

Business Number (BN)

You will need a Business Number (BN) from Canada Revenue Agency for the following reasons:

-To file your annual tax return if your business is incorporated
- If you are importing or exporting goods to and from Canada
- To remit payroll deductions (Income Tax, EI, CPP) for your employees
- To collect and remit GST/HST.

Saving you a Step....
When you register your company name with the Registry of Joint Stock Companies, you will also be assigned a Business Number (BN) from CRA. This number is a common identifier for many businesses. The Registry gets your BN automatically from Canada Revenue Agency (CRA) who assigns it. Service Nova Scotia and Municipal Relations and the Nova Scotia Workers' Compensation Board both use BNs now.

If you need to register for any accounts with CRA, such as GST/HST, import/export, or payroll deductions, the first step of getting the BN is done. Remember to give CRA your BN when you contact them.

Canada Revenue Agency (CRA) - Business Window - Businesses can get one-stop service at Business Windows in most Canada Revenue Agency (CRA) offices. Service is offered at the counter, or by telephone or fax for the four Business Number (BN) accounts (i.e. corporate income tax, import/export, payroll deductions and GST/HST). Business Window staff can also put business clients in touch with the right contact for other Canada Revenue Agency business programs.

CRA may make personalized visits to new employers to help them with trust accounts and withholding procedures. Enquire at the Business Window.

See the document Business Window
Visit the Web site: http://www.cra.gc.ca/menu-e.html

Guide for Canadian Small Businesses

The Canada Revenue Agency (CRA) created this publication to help entrepreneurs have a better understanding of taxation and small business. The information in the guide can help you decide how to plan your business to best comply with the tax obligations and determine which entitlements you might be eligible to receive. Copies of this guide can be obtained in the following ways:

1-800-959-2221 (Forms and Publications)
1-800-959-5525 ( (Business Enquiries and Registrations)
Visit the Web site: http://www.cra-arc.gc.ca/E/pub/tg/rc4070/

2. SPECIFIC TAXATION ISSUES

Information Bulletins - are provided by the Nova Scotia Department of Finance, and they offer financial information on the following topics: Pension Regulations, Sales Tax (HST), General Tax, as well as Tax Credit Information.
Visit the Web site: http://www.gov.ns.ca/finance/publish/

Provincial Tax Commission - a division of Service Nova Scotia and Municipal Relations that is responsible for the collection and administration of provincial Tobacco Tax and Gasoline and Diesel Oil Tax. The Commission also handles private purchase of motor vehicles which attracts provincial tax (15%) payable at time of registration to the Registry of Motor Vehicles, as well as the taxes related to the private purchase of boats and aircraft (15%) of the purchase price.

For further information:
Please call 1-800-565-2336
Visit the Web sites:
http://www.gov.ns.ca/snsmr/taxcomm
http://www.gov.ns.ca/snsmr/taxcomm/bulletin (Revenue Act Tax Bulletins and Guides).

3. TAX CREDITS

The following is a summary of some tax credit programs available to business. Other Information is available through the Canada/Nova Scotia Business Service Centre, Canada Revenue Agency and/or your accountant.

Nova Scotia Department of Finance
Fiscal Policy Division
1723 Hollis Street, 6th floor, P.O. Box 187
Halifax, Nova Scotia B3J 2N3

• The Nova Scotia New Small Business Tax Deduction effectively eliminates the Nova Scotia Corporation Income Tax for the first two taxation years of a new small business incorporated after April 18, 1986 and three years for a new small business incorporated after April 24, 1992. The Corporation must apply, each year, to the Nova Scotia Minister of Finance for a Nova Scotia Tax Deduction Eligibility Certificate.

For further information:
Please call (902) 424-5771 or Fax: (902) 424-0590
See the document The Nova Scotia New Small Business Tax Deduction

Visit the Web site: http://www.gov.ns.ca/finance/taxpolicy/taxcredits/nsb.asp

• Nova Scotia Equity Tax Credit - The Equity Tax Credit, or ETC, is designed to assist Nova Scotia small businesses, co-operatives, and community economic development (CED) initiatives in obtaining equity financing by offering a personal income tax credit to individuals investing in eligible businesses. Equity financing is an alternative to other forms of financing such as debt and traditional government assistance. The credit is not a grant nor is it considered to be a tax shelter.

For further information:
Please call (902) 424-7379 or Fax: (902) 424-0590
See the document Nova Scotia Equity Tax Credit

Visit the Web site: http://www.gov.ns.ca/finance/taxpolicy/taxcredits/etc.asp

• Nova Scotia Research and Development Tax Credit - An investment tax credit of 20% to 35% for scientific research is available. This rate applies to the current and capital scientific research expenditures incurred in a taxation year. Nova Scotia's R&D corporate income tax credit is equal to 15% of expenditures eligible for credit under the Federal IncomeTax Act and is offered against the provincial part of the income tax payable. Information on eligible expenditures, eligible projects, claiming the credit, and appropriate forms can be obtained from your Canada Revenue Agency Taxation District Office.

For further information:
Please call (902) 424-8932 or Fax: (902) 424-0590
See the document Nova Scotia Research and Development Tax Credit

Visit the Web site: http://www.gov.ns.ca/finance/taxpolicy/taxcredits/rd.asp

• Nova Scotia Labour-Sponsored Venture Capital Tax Credit - This tax credit is designed to assist Nova Scotia small and medium-sized businesses and co-operatives in obtaining equity financing by offering a personal income tax credit to individuals investing in registered labour-sponsored venture-capital corporations, or LSVCC's. The LSVCC tax credit has been incorporated as part of the Equity Tax Credit (ETC) Act. Equity financing is an alternative to other forms of financing such as debt and traditional government assistance. The credits are not grants nor are they considered to be tax shelters. The LSVCC tax credit is available to residents of Nova Scotia who are over 19 year of age and who have bona fide reasons for making the investment, other than simply obtaining the tax credit. It should be noted that any approval of shares issued under the program does not constitute an endorsement by government of the corporation or co-operative issuing the shares. The Province does not guaranty any investment. The investor is at risk for his or her investment

For further information:
Please call (902) 424-7379 or Fax: (902) 424-0590
See the document Nova Scotia Labour-Sponsored Venture Capital Tax Credit

Visit the Web site: http://www.gov.ns.ca/finance/taxpolicy/taxcredits/lsvc.asp

Nova Scotia Department of Finance
Federal-Provincial Fiscal Relations
P.O. Box 187
Halifax, N.S. B3J 2N3
Phone: (902) 424-8932
Fax: (902) 424-0590
Visit the Web site: http://www.gov.ns.ca/finance/taxpolicy/taxcredits/mp.asp

Nova Scotia Film Industry Tax Credit -The Nova Scotia Film Tax Credit is a fully refundable provincial corporate income tax credit. The program encourages the development, training and hiring of Nova Scotia Film personnel in all disciplines. The Tax Credit is available to eligible producers of eligible Nova Scotian productions and co-productions within the private film and television production industry.

For further information:
Please call (902) 424-7379
See the document Nova Scotia Film Industry Tax Credit

Visit the Web site: http://www.film.ns.ca

Halifax Regional Municipality Tax and Grants Program - The Halifax Regional Municipality (HRM) Tax and Grants Program provides financial assistance in the form of grants and tax exemptions towards community initiatives that serve community resource, cultural, environmental, and recreational needs and enhance social well-being of the citizens of HRM.

For further information:
Please call (902) 490-5469 or (902) 490-5454
See the document Halifax Regional Municipality Tax and Grants Program

Visit the Web site: http://www.halifax.ca/boardscom/bccgrants/grants.html

Canadian Film or Video Production Tax Credit - The Canadian Film or Video Production Tax Credit is a fully refundable tax credit for films and videos produced and owned by Canadian corporations. The credit can provide assistance of up to 12 percent of the cost of an eligible production.

For further information:
Please call 1-888-433-2200
See the document Canadian Film or Video Production Tax Credit

Visit the Web site: http://www.pch.gc.ca/progs/ac-ca/progs/bcpac-cavco/progs/cipc-cptc/cipc-cptc_e.cfm

Scientific Research and Experimental Development Tax Incentive Program-The SR&ED Tax Incentive Program was established by the Government of Canada to encourage Canadian businesses of all sizes to conduct research and development that will lead to new or improved technologically advanced products or processes. The program gives claimants cash refunds and / or tax credits for their expenditures on eligible research and development work done in Canada. Businesses engaged in developing or advancing new technologies or processes may be eligible for this program.

For further information:
See the document Scientific Research and Experimental Development (SR&ED;) Program
Visit the Web site: http://www.gov.ns.ca/finance/taxpolicy/taxcredits/rd.asp

How do taxpayers apply?
Taxpayers have to complete and submit these forms with the tax return for the year: Form T661, Claim for Scientific Research and Experimental Development (SR&ED) Expenditures Carried on in Canada; Form T2038, Investment Tax Credit .

For further information:
Please call the Local Tax Services Office 1-800-959-5525
See the document Business Window - Supplement
Visit the Web site: http://www.ccra-adrc.gc.ca/contact/tso/NS-e.html

4. ADDITIONAL INFO-GUIDES

See the document - Aboriginal Info-Guide

See the document - Business Start-Up Info-Guide

See the document - Co-operatives Info-Guide

See the document - E-Business Info-Guide

See the document - Employment and Training Info-Guide

See the document - Entrepreneurs with Disabilities Info-Guide

See the document - Exporting Info-Guide

See the document - Financing Info-Guide

See the document - Government Procurement Info-Guide

See the document - Importing Info-Guide

See the document - Innovation Info-Guide

See the document - Library Guide

See the document - Non-Profit Info-Guide

See the document - Young Entrepreneurs Info-Guide

This information is updated on a regular basis, but organizations change unpredictably -- therefore, not all the information as presented may be timely or accurate.

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.