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capital of less than $5 million are exemptfrom the tax, and financial institutions withless than $10 million of taxable capital aresubject to capital tax to the extent that thetaxable capital exceeds $5 million.Businesses subject to tax in Newfoundlandand Labrador may be eligible for (orindividually benefit from) one or more taxcredits, incentives and benefits programsoffered by the provincial government. Theseinclude:Direct Equity Tax Credit;Manufacturing and Processing TaxCredit;Small Business Tax Credit;Small Business Corporate IncomeTax Holiday;Labour-Sponsored Venture CapitalTax Credit;Film Tax Credit;Resort Property Investment TaxCredit;Scientific Research andExperimental Development TaxCredit; andEconomic Diversification and GrowthEnterprises (“EDGE”) Program.Most significantly, corporations that qualifyfor the EDGE Program may receive a 10 or15 year tax holiday from provincialcorporate income and payroll taxes and a50% tax rebate of federal taxes for thesame period, followed by a five year phaseinof these taxes.SALES AND SERVICES TAXThe federal government levies a 5% Goodsand Services Tax (“GST”) on the supply ofmost goods and services.The Atlantic Provinces are parties to anagreement with the federal governmentunder which separate GST and provincialsales taxes have been replaced by a singleHarmonized Sales Tax (“HST”). The HSTrate varies between provinces as follows:ProvinceHST RateNew Brunswick 13%Prince Edward Island 14%Nova Scotia 15%Newfoundland and Labrador 13%Regardless of the province, the federalportion of the HST is 5%, with the provincialportion comprising the difference, which isapplied to the same goods and services asthe GST.The GST/HST which is paid or payable onpurchases, expenses and property used forcommercial activities may be recoverable byclaiming input tax credits. As well, there area variety of rebates available which mayallow businesses and individuals to recoverthe GST/HST paid on certain goods andservices.Imports and exports are subject to variousexceptions from GST/HST. For example,certain goods and services ordinarilytaxable at 5% GST or 13% HST may beTaxation Law 61