February 4, 2014
Today New Brunswick Finance Minister Blaine Higgs delivered the province’s 2014 budget. The budget, which does not include any corporate or personal income tax rate changes, projects a deficit of $391 million in 2014-15 and a deficit of $262 million in 2015-16. In the budget, New Brunswick announces that it will enhance its Small Business Investor Tax Credit to allow corporations and trusts to be eligible for a 15% non-refundable corporate income tax credit on eligible investments up to $500,000, among other changes.
Highlights of tax measures announced in today’s budget are summarized below.
Business Tax Changes
Corporate income tax rates
The budget did not announce any changes to the corporate tax rate. As a result, New Brunswick’s corporate income tax rates effective January 1, 2014 remain as follows:
Small Business Investor Tax Credit
New Brunswick announces that, effective for the 2014 taxation year, it will enhance its Small Business Investor Tax Credit. Under these changes, corporations and trusts will be eligible for a 15% non-refundable corporate income tax credit on eligible investments up to $500,000. This will result in a tax credit of up to $75,000 for New Brunswick corporate and trust investors who invest in eligible small businesses in the province. This program is available to eligible corporations who must apply to the province first to be able to issue shares eligible for this tax credit. Prior to this budget amendment, the Small Business Investor Tax Credit was available only to individuals as a 30% non-refundable credit against their New Brunswick personal income tax up to $250,000.
This enhancement should be a welcome change for both small businesses and investors, as they have long been lobbying the government for easier access to raise capital.
Personal income tax rates
No changes to New Brunswick’s income tax rate were announced in the budget. As a result, New Brunswick’s combined federal and provincial top marginal tax rates for 2014 and 2013 are as follows. Note that although the personal income tax rates did not change this year, they increased as of July 1, 2013 under the province’s 2013 budget.
New Brunswick says it intends to invest more than $80 million over five years in research and innovation through the establishment of the New Brunswick Research and Innovation Council.
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We can help
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 Department of Finance.
KPMG Tax professionals in New Brunswick:
Luann Jones-Foster, CA
Todd MacIntosh, CA
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