New Small Business Tax Deduction - Grant Analysis ### 📋 Eligible Entities - New small businesses incorporated in Nova Scotia - Canadian-controlled private corporations (CCPCs) that meet small business thresholds - Businesses in their first three taxation years following incorporation - Entities with active business income generated in Nova Scotia - Excludes: Personal service businesses, specified investment businesses, and businesses primarily engaged in providing services to related parties ### 💰 Funding Details - Benefit Type: Tax deduction (not a direct cash grant) - Value: Elimination of Nova Scotia corporate income tax on eligible income - Duration: First 3 consecutive taxation years after incorporation - Matching Requirement: None - Repayability: Non-repayable tax relief - Cash Flow Impact: Increased retained earnings through reduced tax liability - Note: Applies to Nova Scotia provincial tax only; federal corporate income tax still applies ### 🛠️ Approved Expenses This is a tax deduction program, not expense-based funding. The deduction applies to: - Net active business income earned in Nova Scotia - Revenue from legitimate business operations - Income-generating activities conducted within the province - All business expenses that qualify under normal tax deduction rules Not covered: Investment income, capital gains, or passive income streams ### ⚠️ Conditions & Milestones - Business must be newly incorporated in Nova Scotia (applies from incorporation date) - Deduction applies to three consecutive taxation years only (no carryforward) - Business must maintain active business operations in Nova Scotia throughout the period - Must comply with all federal and provincial tax filing requirements - Requires filing of corporate tax returns to claim the benefit - Businesses must maintain arm's length operations (CCPCs only) - If business ceases operations before year 3, deduction eligibility ends - Benefit is automatic upon meeting eligibility criteria; no application required