Government of Nova Scotia, Canada
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New Small Business Tax Deduction

This deduction effectively eliminates the Nova Scotia corporate income tax for the first 3 taxation years of a new small business after incorporation.  The corporation must apply each year to the Nova Scotia Minister of Finance and Treasury Board for a Nova Scotia Tax Deduction Eligibility Certificate.

Eligibility

All new businesses incorporated in Nova Scotia after April 18, 1986 that are:

  • Have at least two employees, one of whom must be full-time and unrelated to any shareholder, for the specified taxation year
  • Are not associated with another corporation(s)
  • Are not in a partnership or a joint venture with an ineligible corporation(s)
  • Are not a beneficiary of a trust where any beneficiary is ineligible
  • Are not a previous active business with essentially the same owner(s) or related owner(s)
  • Are not a professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor
  • Are not a business carrying on the same, or substantially the same, business activity as was carried on as a sole proprietorship, partnership or corporation
  • For complete requirements for eligibility see
    - Section 42 Income Tax Act (Nova Scotia)
    Related regulations

How to Apply

  • The application form should be filed at the end of each of the corporation’s first 3 taxation years.
  • Nova Scotia Department of Finance and Treasury Board will not issue a certificate of eligibility to an eligible company until it has received an application form with a Canada Revenue Agency Form 341.
  • Nova Scotia Department of Finance and Treasury Board requires a separate application form for each taxation year.
  • Applications must be received by the Department of Finance and Treasury Board within three years of the corporations taxation year end.
  • Please note that due to confidentiality, a signed Letter of Authorization from the applicant company is required before the department will discuss any matter with anyone other than the applicant company.
  • Applications for previous taxation years must be received before current applications will be processed, even if the company would have been ineligible for that taxation year.

New Small Business Tax Deduction

Orange ClockFor More Information


Elvira Dalag
Revenue Officer
Tel:  902.424.2808
Email: 
novascotia.ca


Forms
Downloads


Download the New Small Business Application (pdf)