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______________________________________________________________________________Stewart McKelveyDoing Business in Atlantic Canada• Research and Development Tax CreditNova Scotia’s Research and Development Tax Credit (R&D credit) offers tax relief to incorporatedNova Scotia 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 refund ofthe tax credit where the tax credit exceeds Nova Scotia tax payable. The refund amount is equal tothe amount of the credit in excess of tax otherwise payable under the Nova Scotia Income Tax Act.Refundability is available to all corporations that incur qualified SR&ED expenditures in NovaScotia where the corporation has or would have taxable income allocated to Nova Scotia.Recapture: In the April, 2002 Budget, the Minister of Finance announced the introduction of a creditrecapture similar to the federal recapture for change of use or sale or transfer of assets chargedunder a prior credit.• Film Tax CreditNova Scotia’s Film Tax Credit is a refundable tax credit for costs directly related to the productionof films in Nova Scotia. The program encourages the development, training and hiring of NovaScotia film personnel in all disciplines.Eligibility: The tax credit is available to qualifying productions and co-productions produced and/orshot in Nova Scotia. Production companies applying for the tax credit must have a permanentestablishment in Nova Scotia (a fixed place of business, a production office, a branch etc.) andmust be incorporated under the laws of Nova Scotia, another province of Canada, or Canada.There is no limit on the size of the production budget, no corporate or asset cap, and no Canadiancontent or copyright ownership requirements associated with the tax credit. The tax credit is notreduced by any other tax credits that the production may receive.Calculations: The tax credit is calculated as the lesser of 50% of eligible Nova Scotia labourexpenditures or 25% of the total production costs for productions that occur in the Halifax RegionalMunicipality or the lesser of 60% of eligible Nova Scotia labour expenditures or 30% of totalproduction costs for productions that occur in other regions of the province. A five percent frequentfilming bonus is available to companies that have produced three films in a 24 month period.Further information on Nova Scotia’s Film Tax Credit is available at:Film Nova ScotiaP.O. Box 34104Scotia Square, RPOHalifax, Nova ScotiaB3J 3S1Toll free: 1-888-360-2111Fax: 902-424-0617web: http://film.ns.ca/• Digital Media Tax CreditThe Digital Media Tax Credit is a refundable tax credit for costs directly related to the developmentof interactive digital media products in Nova Scotia. The tax credit amounts mirror those of the FilmTax Credit (see above).• Nova Scotia Equity Tax CreditThe Equity Tax Credit is designed to assist Nova Scotia small businesses, co-operatives, andcommunity economic development (“CED”) initiatives in obtaining equity financing by offering apersonal income tax credit to individuals investing in eligible businesses. Equity financing is anPage 95