NLIS 20
March 27, 2003
(Finance)
 

Government announces new small business corporate income tax holiday

Finance Minister Joan Marie Aylward today announced a corporate income tax (CIT) holiday for new small businesses in growth sectors of the economy. It is one of several initiatives provided for in Budget 2003 to strengthen the environment for business growth.

The tax holiday will provide a provincial corporate income tax exemption to eligible new small businesses incorporated between April 1, 2003 and March 31, 2006. Designated growth sectors are technology, aquaculture, manufacturing, export, tourism, research and development, forestry and agrifoods, processing, import replacement and cultural industries.

For businesses located on the Northeast Avalon, the tax holiday will be provided for the new company�s first three fiscal years. For those located outside the Northeast Avalon, the tax holiday will apply for five years.

"The new small business tax holiday will provide assistance to new businesses during the most critical stage of their development," said Minister Aylward. "Relief from provincial corporate income tax during their early years of operation will allow new companies to invest more resources into becoming firmly established and increase their chances of long-term success."

Media contact: Josephine Cheeseman, Communications, (709) 729-0329.

Government is implementing a corporate income tax (CIT) holiday for eligible new small businesses incorporated between April 1, 2003 and March 31, 2006. A corporate income tax holiday will be provided during the start-up phase of new small businesses that are not associated with another business and that operate in designated growth sectors of the economy. This tax relief will apply for income eligible for the small business deduction.

Designated growth sectors are:

• technology
• aquaculture
• manufacturing
• export
• tourism
• research and development
• forestry and agrifoods
• processing
• import replacement
• cultural industries

Business activities that are not eligible include:

• incorporation of an existing business
• wholesale and retail trade
• food and liquor establishments
• personal services, business services, professional practices and trades
• real estate marketing and development
• oil and gas development and production
• mineral resource exploration
• financial services
• fish harvesting and primary fish processing, except processing of underutilized species

For businesses located on the Northeast Avalon, the tax holiday will be provided for the first three fiscal years of the corporation. For those located outside the Northeast Avalon, the duration will be five years.

2003 03 27                                        3:45 p.m.