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BUSINESS TAXATIONNEW SMALL BUSINESS TAX DEDUCTIONNova Scotia’s New Small Business Tax Deduction effectively eliminates the Nova ScotiaCorporation Income Tax for the first three years for a new small business after incorporation.The Corporation must apply each year to the Nova Scotia Minister of Finance and TreasuryBoard for a Nova Scotia Tax Deduction Eligibility Certificate.Eligible Corporations: All new businesses incorporated in Nova Scotia after April 18, 1986 that:have at least two employees, one of whom must be full-time and unrelated to anyshareholder, for the specified taxation year; are not associated with anothercorporation(s);are not in a partnership or a joint venture with an ineligible corporation(s);are not a beneficiary of a trust where any beneficiary is ineligible;are not a previous active business with essentially the same owner(s) or relatedowner(s);are not a professional practice of an accountant, dentist, lawyer, medical doctor,veterinarian or chiropractor; andare not a business carrying on the same, or substantially the same, business activity aswas carried on as a sole proprietorship, partnership or corporation.RESEARCH AND DEVELOPMENT TAX CREDITNova Scotia’s Research and Development Tax Credit offers tax relief to incorporated NovaScotia firms that incur qualified scientific research and experimental development (“SR&ED”)expenditures made in Nova Scotia, as defined by the federal Income Tax Act.R&D Rate: The credit rate for qualified expenditures is 15%. The rate is applicable to allcorporations that incur SR&ED expenditures in Nova Scotia, regardless of size.Refundability: Corporations that incur qualified SR&ED expenditures will be eligible for a refundof the tax credit where the tax credit exceeds Nova Scotia tax payable. The refund amount isequal to the amount of the credit in excess of tax otherwise payable under the Nova ScotiaIncome Tax Act. Refundability is available to all corporations that incur qualified SR&EDexpenditures in Nova Scotia where the corporation has or would have taxable income allocatedto Nova Scotia.Business Incentives 172