2023 Nova Scotia budget tax highlights

On March 23, the Nova Scotia government released its 2023-24 budget. The following are highlights of the key tax measures.

Personal tax measures

No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2023 are outlined below:

More Opportunity for Skilled Trades (MOST) tax refund

Introduced in the 2022‑23 budget ⁠–⁠ for 2022 and subsequent tax years ⁠–⁠ MOST will provide a refund of provincial personal income tax on the first $50,000 of earned income for individuals under the age of 30 who are employed and registered in selected skilled trades and video industry occupations.

See the Government of Nova Scotia website for a detailed listing of eligible skilled trades and occupations.

The MOST program will be in place for the 2022 income tax year. Eligible workers will qualify for their refund this year, after they file their 2022 income tax return and receive a notice of assessment from the Canada Revenue Agency.

Starting in 2024 (with eligibility based on the 2023 income tax year), the More Opportunity for Skilled Trades tax refund is expanding to include nurses. To qualify for the refund, nurses need to be under 30 (in the 2023 income tax year) and be a registered nurse, licensed practical nurse or nurse practitioner who works (in 2023) for a publicly funded employer (like Nova Scotia Health Authority, Emergency Medical Care Inc., continuing care and disability support programs and publicly funded schools as part of the School Health Partnership Program).

Corporate tax measures

No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2023 are outlined below:

Nova Scotia capital investment tax credit

As announced last fall, the Nova Scotia capital investment tax credit ⁠–⁠ which was set to end Dec. 31, 2024 ⁠–⁠ has been extended to Dec. 31, 2029. The amount of the tax credit is increased from 15 per cent to 25 per cent of the capital cost for qualified property acquired on or after Oct. 1, 2022. An eligible corporation can claim this tax credit on qualified property acquired before Jan. 1, 2030, for use in Nova Scotia as part of an approved project that is more than $15 million in total cost.

Nova Scotia corporate tax reduction for new small businesses

As announced last fall, the Nova Scotia corporate tax reduction for new small businesses applies to the first three tax years of an eligible corporation if it is also eligible for the federal small business deduction for the tax year.

For each of the three tax years, an eligible corporation must apply to the Department of Finance and Treasury Board of Nova Scotia and receive an eligibility certificate before claiming the tax reduction. Once the eligibility certificate is received, the corporation can claim this tax reduction to reduce Nova Scotia income tax otherwise payable.

An eligible corporation must:

• Be a Canadian-controlled private corporation incorporated in Nova Scotia, or
• Be a corporation incorporated outside the province, but inside of Canada, that
  • pays at least 25 per cent of its wages to employees who are resident in the province, and
  • has its head office in the province

and

• Have at least two employees, one of whom must be full‑time and not related to a specified shareholder of the corporation

Next steps

Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.