For any financial institution that has a permanent establishment in Nova Scotia and whose taxation year begins after October 31, 2021, the capital tax is now administered by the federal government. If the corporation’s taxation year starts before November 1, 2021, use the Schedule Corporation Capital Tax Return (Jump Code: NS-CAP-TAX).
Complete Schedule 352 to determine the Nova Scotia financial institutions capital tax.
The basic capital deduction for a taxation year is equal to:
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$5 million, if the total amount of the capital of the financial institution and its related financial institutions is $10 million or less;
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$30 million, for a financial institution that is a trust company or a loan company with its registered office in Nova Scotia;
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the deduction is NIL in all other circumstances.
When Yes is selected on the below Schedule 352 custom lines, the program determines that the basic capital deduction is $30 million.
Is the corporation a trust company or a loan company? and
For a trust company or a loan company, is its registered office in the province?
If not, in order to determine the basic capital deduction, the program verifies the capital for the year of the members of the related group.
To allocate the basic capital deduction among the members of the related group, you must complete Schedule 353. Data used to complete this schedule comes from Schedule 9, Related and Associated Corporations Workchart (Jump Code: 9 WORKCHART).
For more details, consult Part III of the Income Tax Act of Nova Scotia.
Tip: For more information on the T2 data connection, please consult the T2 Data Connection guide, available in the Professional Centre.