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NOVA SCOTIA

1997 COMBINED FEDERAL AND NOVA SCOTIA PERSONAL INCOME TAX RATES1

TAXABLE INCOME NOVA SCOTIA 58.5%
    MARGINAL RATE ON
LOWER LIMIT UPPER LIMIT BASIC TAX2 RATE ON EXCESS DIVIDEND INCOME 3 CAPITAL GAINS4
$ 0 $ 6,456 $ 0 0.00% 0.00% 0.00%
6,457 29,590 0 27.46 7.40 20.59
29,591 59,180 6,351 41.99 25.57 31.59
59,181 62,192 18,776 46.84 31.63 35.13
62,193 78,035 20,187 48.29 32.61 36.21
78,036 AND UP 27,837 49.98 33.75 37.49
  1. The tax rates include the federal and provincial surtaxes and reflect budget proposals to May 15, 1997. Where the tax is determined under the minimum tax provisions, the above table is not applicable.
  2. The tax determined by the table should be reduced by the provincial tax value of all applicable tax credits (see chart below) other than the basic personal tax credit, which has been reflected in the calculations.
  3. The rates apply to the actual amount of taxable dividends received by individuals from taxable Canadian corporations.
  4. The rates apply to the actual amount of the capital gain. The capital gains exemption on qualified farm property and small business corporation shares may apply to eliminate the tax on those specific properties.

1997 FEDERAL PERSONAL TAX CREDITS AND RELATED TAX VALUE1 IN NOVA SCOTIA

   FEDERAL CREDIT N. S. TAX VALUE
Amount of credit:     
Basic personal credit (see note 2 above) $1,098 $1,892
Spousal credit
(reduced by 17% of spouse's income over $538)

915

1,576
Equivalent-to-spouse credit
(reduced by 17% of dependent's income over $538

915

1,576
Infirm dependent aged 18 or over
(reduced by 17% of dependent's income over $4,103)

400

689
Age credit (65 or over)2 592 956
Disability credit 720 1,240
Pension income (maximum) 170 293
Education - per month 26 44
Credits as a percentage of:     
Tuition fees 17.00% 29.30%
Medical expenses3 17.00 29.30
Charitable donations    
- first $200 17.00 29.30
- remainder 29.00 49.98
CPP contributions4 17.00 29.30
EI premiums 17.00 29.30
  1. The tax value of each tax credit is the sum of the federal tax credit, the related reduction in Nova Scotia tax (58.5% of credit) and the reduction in federal and Nova Scotia surtaxes as they would apply to taxpayers in the highest tax bracket.
  2. The maximum age credit of $956 occurs at $25,921 of net income and declines to nil as net income rises to $49,134.
  3. The credit is computed as 17% of the amount by which eligible medical expenses exceed the lesser of $1,614 and 3% of net income.
  4. All CPP paid by both employees and self-employed individuals will give rise to a tax credit.

ALTERNATIVE MINIMUM TAX

Alternative minimum tax (AMT) may be applicable where the tax otherwise payable is less than the tax determined by applying the relevant AMT rate (29.30% including federal and Nova Scotia surtaxes) to the individual's taxable income adjusted for certain preference items. Additions to taxable income in determining adjusted taxable income include most contributions to RRSPs and registered pension plans, the non-taxable portion of capital gains, and certain investment losses and related carrying charges. Deductions in determining adjusted taxable income include the 25% gross-up on Canadian dividends. All individuals are also entitled to a basic AMT exemption of $40,000.

1997 TAX RATE CARD

CORPORATE INCOME TAX RATES1

  MANUFACTURING AND PROCESSING INCOME OTHER INCOME
INCOME ALLOCATED TO: ELIGIBLE FOR SBD2 EXCESS ELIGIBLE FOR BD2 EXCESS3
NEWFOUNDLAND 18.12%4 27.12%4 18.12%4 43.12%4
P.E.I. 20.62 29.62 20.62 44.12
NOVA SCOTIA 18.124 38.12 18.124 45.12
NEW BRUNSWICK 20.12 39.12 20.12 46.12
QUEBEC 19.034 31.274 19.034 38.274,5
ONTARIO 22.62 35.627 22.62 44.626,7
MANITOBA 22.124 39.12 22.124 46.12
SASKATCHEWAN 21.12 39.128 21.12 46.12
ALBERTA 19.12 36.62 19.12 44.62
BRITISH COLUMBIA 22.124 38.62 22.124 45.62
N.W.T. 18.12 36.12 18.12 43.12
YUKON 15.62 24.62 19.12 44.12
NON-RESIDENT N/A N/A N/A 39.52
Net Federal Rate 13.12% 22.12% 13.12% 29.12%
  1. The rates shown are the combined federal and provincial rates for corporations with fiscal years commencing January 1, 1997 and ending December 31, 1997 Different rates will apply to corporations with non-calendar year ends or short year ends. The rates reflect budget proposals to May 15, 1997.
  2. The small business deduction (SBD) and related lower provincial rates are applicable to the first $200,000 of active business income of Canadian-controlled private corporations (CCPCs) or associated groups of CCPCs. CCPCs or associated groups with taxable capital in excess of $10 million will have the benefit of the SBD reduced. The benefit is eliminated at $15 million.
  3. There is an additional 6.67% refundable federal income tax on investment income of CCPCs.
  4. The tax rate for new companies qualifying for the applicable provincial tax exemption is equal to the net federal rate. In Nova Scotia, a three-year New Small Business Tax Reduction program exists for businesses incorporated after April 24, 1992. In Quebec, a three-year exemption from income, capital and payroll taxes is available to new corporations incorporated after March 25, 1997, carrying on an eligible business. In Manitoba, a small business tax reduction applies for the first five years for qualifying corporations incorporated before 1993. In Newfoundland, a 10-year exemption from income, payroll and retail sales taxes is available for certain qualifying corporations. British Columbia has introduced a two-year income tax exemption for new eligible small businesses incorporated before March 21, 2001.
  5. The Quebec tax rate is 45.83% on non-active business income for Quebec tax purposes.
  6. The Ontario tax rate is 1% lower on farming, fishing, mining and logging income not eligible for the SBD.
  7. Ontario imposes a surtax on active business income exceeding $200,000 where the corporation has benefitted from the Ontario SBD. The Ontairo SBD benefit is effectively eliminiated entirely at about $500,000 of taxable income.
  8. The manufacturing and processing profits rate is reduced by up to 7% by way of tax rebate.

CAPITAL AND PAYROLL TAXES

JURISDICTION GENERAL CAPITAL TAX RATE PAYROLL TAX RATES
MANITOBA 0.3%1 0 - 4.5%4
NEWFOUNDLAND --- 2.05
ONTARIO 0.32 0 - 1.956
QUEBEC 0.64 4.267
SASKATCHEWAN 0.6 ---
BRITISH COLUMBIA 0.33 ---
NOVA SCOTIA 0.258 ---
  1. Tax reduced if taxable capital is less than $2,000,000.
  2. Tax reduced if taxable capital is less than $2,300,000.
  3. Tax reduced if taxable capital is less than $1,750,000.
  4. Tax is nil on first $750,000 of payroll; 4.5% on second $750,000; 2.25% thereafter.
  5. Tax is nil on first $100,000 of payroll; 2.0% for payroll over $100,000.
  6. Tax is nil on first $200,000 of payroll; 1.95% for payroll over $200,000.
  7. A payroll tax refund is $1,200 is available for each full-time job (maximum 300 created as of January 1, 1997.
  8. Effective April 1, 1997. Tax is reduced is taxable capital is less than $10,000,000.