Tax Structure

Corporate taxation of oil and gas activities offshore Nova Scotia is comprised primarily of the following:

• Federal and Provincial income taxes on a corporation’s taxable income (taxable income being determined in identical fashion federally and provincially);
• Provincial capital tax on a corporation’s taxable capital employed;
• Federal / Provincial harmonized consumption tax (the Harmonized Sales Tax) on taxable goods and services.
• Commercial goods brought into Canada are subject to customs duty and the 5% Federal portion of the Harmonized Sales Tax, unless they are exempt or free of duty. Imports from countries such as the United States that have a free trade agreement with Canada would not be subject to customs duties. Of particular note for the oil and gas industry, there is a special holiday until May 20014 on customs duties for mobile offshore drilling units.

In addition to these forms of taxation, the Province of Nova Scotia collects a royalty on oil and gas production.

Further information on corporate taxation of oil and gas activities in Offshore Nova Scotia is available federally from Canada Revenue Agency and provincially from the Nova Scotia Department of Finance or the Nova Scotia Department of Energy.