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Highlights of the 2014 Nova Scotia Budget 

Tax News Flash
Tax News Flash
Tax News Flash

Highlights of the 2014 Nova Scotia Budget

April 3, 2014

No. 2014-22

 

Today Nova Scotia Finance Minister Diana Whalen delivered the province’s 2014 budget. The budget, which does not include any corporate or personal income tax rate changes, projects a deficit of $279 million in 2014-15. Among other changes, the budget cancels the previously planned HST rate reduction and eliminates the Graduate Retention Rebate.

 

The Nova Scotia government also confirmed its previous commitment to undertake a comprehensive review of taxes, fees, and regulations based on the principles of fairness, sustainability, simplicity, and competitiveness. The review will be delivered in fall 2014.

 

Highlights of tax measures in the budget are noted below.

 

Business Tax

 

Corporate income tax

 


Corporate Income Tax Rates – As of January 1, 2014

 

Nova Scotia

Combined Federal and Nova Scotia

General
M&P
Small business1

16.0%
16.0%
3.0%

31.0%
31.0%
14.0%


1
Nova Scotia’s small business rate applies on the first $350,000 of active business income.

 

The budget did not announce any changes to the corporate income tax rate. As a result, the corporate income tax rates effective January 1, 2014 are as follows:

 

Personal Tax

 

Personal income tax

 

Combined Federal and Provincial Top Marginal Tax Rates for 2014

Interest and regular income

50.00%

Capital gains

25.00%

Eligible dividends

36.06%

Non-eligible dividends

39.07%*

* The non-eligible dividend rate increased from 36.21% as a result of the federal changes to the non-eligible dividend tax credit rate announced in 2013.

 

No changes to Nova Scotia’s personal income tax rate were announced in the budget. As a result, Nova Scotia’s combined federal and provincial top marginal tax rates are as follows:

 

Graduate Retention Rebate

 

The budget eliminates the Graduate Retention Rebate, effective January 1, 2014. According to Nova Scotia, graduates will still able to receive the rebate for the 2013 tax year.

 

Indirect Tax

 

Harmonized Sales Tax

 

In maintaining the provincial Harmonized Sales Tax at 15%, the budget cancels plans to reduce the HST rate to 14% (from 15%) this year, as announced in early 2012. Previously, Nova Scotia announced it would reduce the HST rate to 14% (from 15%) on July 1, 2014 and to 13% (from 14%) on July 1, 2015, or earlier.

 

Other Tax

 

Power efficiency fee

 

The budget announces that the efficiency fee will be eliminated from power bills effective January 1, 2015.

 

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We can help

 

Your KPMG adviser can help you assess the effect of the tax changes in this year’s Nova Scotia 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 Nova Scotia Ministry of Finance.


 

Information is current to April 3, 2014. The information contained in this TaxNewsFlash-Canada is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.

 

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