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Prospectus Tax Credit Regulations

made under Section 46 of the
Income Tax Act
R.S.N.S. 1989, C. 217
O.I.C. 96-36 (January 23, 1996), N.S. Reg. 14/96

1 These regulations may be cited as the Prospectus Tax Credit Regulations.

2 All terms defined in the Income Tax Act have the same meaning in these regulations, unless otherwise defined.

3 In Section 13D [46] of the Act and these regulations

(a) "corporation" means a corporation incorporated pursuant to the laws of the Province, a province or Canada with total assets, calculated pursuant to Section 7 of the Equity Tax Credit Regulations, less than 50 million dollars and with at least 25% of salaries and wages, calculated pursuant to clause (g) of Section 2 of the Equity Tax Credit Regulations, paid in Nova Scotia;

(b) "expenditure with respect to audit" means an expenditure paid to a qualified auditor for performing an audit of the financial statements of the corporation that is directly attributable to the preparation of a prospectus required by a province's securities Act and regulations for a public offering of shares from treasury or a prescribed exchange for purposes of becoming listed on that exchange but, for greater certainty, does not include an expenditure with respect to an audit where the corporation regularly prepares audited financial statements;

(c) "expenditure with respect to legal expenses" means an expenditure made by a corporation to a solicitor which is directly attributable to the preparation of a prospectus required by a province's securities Act and regulations for a public offering of shares from treasury or a prescribed exchange for purposes of becoming listed on that exchange;

(d) "expenditure with respect to printing" means an expenditure made by a corporation which is directly attributable to the printing of a prospectus required by a province's securities Act and regulations for a public offering of shares from treasury or a prescribed exchange for purposes of becoming listed on that exchange;

(e) "Minister" means the Minister of Finance or an officer designated by the Minister to perform any of the duties and exercise any of the powers imposed or conferred on the Minister by or pursuant to Section 13D [46] of the Act;

(f) "normal reassessment period" has the meaning given that expression by subsection 152(3.1) of the Federal Act;

(g) "prospectus" means a prospectus as defined in the Securities Act or any document required by a province's securities Act and regulations for a public offering of shares from treasury or a prescribed exchange for purposes of becoming listed on that exchange;

(h) "prescribed exchange" means an exchange incorporated pursuant to the laws of the Province, a province or Canada;

(i) "qualified auditor" means a person authorized by an Act of the Province or a province to give an audit opinion on financial statements.

4 For the purposes of subsection 13D(2) [46(2)] of the Act, the amount of eligible expenditures made in the taxation year is the aggregate of all eligible expenditures made less any government assistance, non-government assistance or any other inducements received in respect of such expenditures, other than government assistance received pursuant Section 13D [46] of the Act.

5 For the purposes of subsection 13D(2) [46(2)] of the Act, a corporation may make application, at any time after its taxation year end and before the end of the normal reassessment period, to the Minister for a tax credit certificate by filing with the Minister, in a form acceptable to the Minister, an application containing at least the following information:

(a) a reconciliation of all expenditures for which the corporation is making application for a credit, in sufficient detail for the Minister to determine the nature, timing and amount of the expenditure; and

(b) a copy of the prospectus approved by the Securities Commission or accepted by the prescribed exchange.

6 For the purposes of subsection 13C[D](3) [46(3)] of the Act, where the Minister is satisfied that the corporation applying for a tax credit certificate has used, or will use, a majority of the funds raised through the issue of shares for which application is being made for investment in active business activities in Nova Scotia, the Minister may issue a certificate to the corporation.