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March 26, 2013

No. 2013-13

 

 

Highlights of the 2013 Newfoundland Budget

Today Newfoundland and Labrador Finance Minister Jerome Kennedy delivered the province’s 2013 budget. The budget anticipates a deficit of $430.9 million in 2013, $563.8 million in 2014 and $650.5 million in 2015. The budget includes a sustainability plan that lays out the province’s fiscal management for the next 10 years, including a return to surplus by 2016.

The budget does not include any corporate or personal income tax rate changes or any other significant income tax measures. The budget introduces new fees and increases some existing fees, including those for quarry material, forestry permits and various fisheries and aquaculture activities.

Highlights of measures in the budget are noted below.

Business Tax

Corporate income tax rates

The budget did not introduce any new corporate income tax rate changes. As a result, Newfoundland and Labrador’s corporate income tax rates effective January 1, 2013 remain as follows:

       Corporate Income Tax Rates – As of January 1, 2013

 

Newfoundland and Labrador

Combined Federal and Newfoundland and Labrador

General

M&P

Small business1

14.0%

5.0%

4.0%

29.0%

20.0%

15.0%

1.  Newfoundland’s small business rate applies on the first $500,000 of active business income.

Film and video tax credit

The Film and Video Tax Credit limit will increase to a maximum of $4 million (from $3 million) for eligible projects of an associated corporate group.

Personal Tax

Personal income tax rates

No changes to the personal income tax rates were announced. As a result, Newfoundland and Labrador’s combined top marginal tax rates remain as follows:

Personal Combined Top Marginal

Tax Rates for 2013

Interest and regular income

42.30%

Capital gains

21.15%

Eligible dividends

22.47%

Non-eligible dividends

29.96%

 

Fees and Tobacco Tax

Fees

The budget increases various fees and implements some new fees as well. These changes affect fees for the following items, among others:

·      Online vehicle registration renewals

·      Provincial historic sites

·      Quarry material

·      Ferry service

·      Highway access permits

·      Tender documents

·      Forestry permits

·      Tax clearance certificates

·      Labour standards clearance certificates

·      Various fisheries and aquaculture activities.

Tobacco tax

The tobacco tax will increase by 1.5 cents per cigarette, effective 12:01 am March 27, 2013.

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We can help

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

For details, contact:

KPMG Tax professionals in Newfoundland and Labrador

 

Kevin Sullivan

Partner, Tax

T: 709-733-5003

E: kgsullivan@kpmg.ca

 

Ian Cumbie

Senior Manager, Tax
T: 709-733-5012

E: icumbie@kpmg.ca

 

 

 

Information is current to March 26, 2013. 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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