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2012 Nova Scotia Budget Bill — More Details for HST Rate Reduction - by Line Arseneau  

Canadian Tax Adviser


April 17, 2012


Line Arseneau
Montreal, National Indirect Tax


Bill 17 to enact Nova Scotia's 2012 budget received first reading in the provincial legislature on April 12, 2012. Bill 17 reduces the small business income tax rate to 3.5% (from 4%) effective January 1, 2013, and lowers the province's Harmonized Sales Tax (HST) rate beginning in 2014. Since the bill has received first reading, the income tax measures in the budget are considered substantively enacted for purposes of Canadian GAAP as of April 12, 2012 (Nova Scotia has a majority government).

HST reduction effective dates
Bill 17 provides that Nova Scotia will take the necessary steps under the Comprehensive Integrated Tax Co-ordination Agreement (CITCA) to reduce the provincial component of HST from 10% to 9% effective July 1, 2014 and from 9% to 8% effective July 1, 2015 (or earlier dates in 2014 and 2015 as determined by the Governor in Council). For a provincial value added tax (PVAT) rate change, a province must generally advise the federal government and fulfill the conditions stated in the CITCA.


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