March 27, 2012
Today New Brunswick Finance Minister Blaine Higgs delivered the province’s 2012 budget.The budget projects a deficit of $183 million in 2012-13, a deficit of $99 million in 2013-14 and a balanced budget by 2014-15 ($6 million surplus). The budget increases the Financial Corporation Capital Tax rate and announces plans to review the Dividend Tax Credit. The budget does not include any corporate or personal income tax rate changes.
Highlights of tax measures announced in today’s budget are summarized below.
Corporate income tax rates
The budget did not introduce any new corporate income tax rate changes. As a result, New Brunswick's corporate income tax rates effective January 1, 2012 remain as follows:
Financial Corporation Capital Tax
The budget increases the Financial Corporation Capital Tax rate to 4% (from 3%), effective April 1, 2012.
The budget announces that the government is currently developing a royalty system that it says will see the province receive its fair share of profits from the development of New Brunswick’s natural resources.
Personal income tax rates
No changes to the personal income tax rates were announced. As a result, New Brunswick's combined top marginal tax rates remain as follows:
Dividend Tax Credit
The budget announces that New Brunswick’s government will review the Dividend Tax Credit for dividends from corporations subject to the general corporate income tax rate.
Property tax changes
The budget increases the Real Property Transfer Tax rate to 0.5% (from 0.25%), effective June 1, 2012.
The budget announces several property tax reforms effective for the 2013 property tax year that will:
- Introduce more equitable treatment of all property types
- Gradually reduce the provincial residential property tax rate on apartments, second homes and cottages
- Gradually reduce the provincial business property tax rate.
New Brunswick’s government says that changes to property tax will be phased in over four years and that it will provide additional detail in a white paper to be made available in the next several months.
Your KPMG adviser can help you assess the effect of the tax changes in this year’s New Brunswick budget on your personal finances or business affairs, and point out ways to take advantage of their benefits or ease their impact. We can also keep you abreast of the progress of these proposals as they make their way into law and help you bring any concerns you may have to the attention of the New Brunswick’s Department of Finance.
You are invited to join KPMG on April 12, 2012 for our annual Spring Economic Outlook event taking place in Moncton and Fredericton. KPMG's Tax Professionals will share insights on specific tax measures from the federal and New Brunswick provincial budgets. Find out more: http://tinyurl.com/89vs57z
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