Recent Strategic Tax Incentives, Government, Business Facts, Investing in Manitoba, Manitoba Competitiveness, Training and Trade

Recent Strategic Tax Incentives

Corporation Income Tax: The general rate is reduced to 14.5% in 2006, and will be further reduced to 14.0% in 2007, and to 13.0%* in 2008. The small business rate is reduced to 4.5% in 2006, and will be further reduced to 3.0% in 2007 (superseding the 2005 announcement to reduce the small business tax to 4.0%).
Corporation Capital Tax: The $5 million deduction announced in the 2003 Budget will be increased to $10 million in 2007. For corporations with taxable paid-up capital between $10 million and $20 million, the capital tax rate will be 0.3%, and for corporations with taxable paid-up capital over $20 million, the rate will be 0.5%. In 2008, the 0.3% rate will be reduced to 0.2%* and the 0.5% rate will be reduced to 0.4%.*
Tax Credit Program adjustments:
- Manufacturing Investment Tax Credit – The Manufacturing Investment Tax Credit is renewed for three years to 2009 and the refundable portion is increased to 35% of the earned credit.
- Co-operative Education Tax Credit – A parallel incentive is now offered to unincorporated employers.
- Co-op Graduates Hiring Incentive – Under this new incentive, Manitoba employers who hire and retain recent graduates from recognized post-secondary co-operative education programs can receive 5% of wages and salaries paid to the graduates in each of the first two full years of employment, to a maximum of $2,500 for each year.

*Subject to requirements of Balanced Budget legislation

Corporation Income Tax: The general rate will be reduced to 14.5% in 2006, and 14.0% in 2007. The small business rate will be reduced to 4.5% in 2006, and 4.0% in 2007.
Manufacturing Investment Tax Credit: The 10% Manufacturing Investment Tax Credit has been broadened to apply to purchases of both new and used buildings, machinery & equipment; with the first 20% of the earned credit now refundable.
Research and Development Tax Credit: The Manitoba R&D Tax Credit has been increased to 20% of eligible expenses, making it one of the most attractive in Canada.
Film and Video Production Tax Credit enhancements:
- increased from 35% to 45%
- pre-production period extended
- serial productions and producers now recognized under the frequent filming incentive
- rural and Northern incentive extended to encompass more of Manitoba
Co-operative Education Tax Credit – extended to December 31, 2008. The credit encourages employers in Manitoba to provide work placements to co-op students in post-secondary institutions.

Corporation Income Tax: After 2005, the general rate will decrease from 15.0% to 14.5%, and the small business rate will decrease from 5.0% to 4.5%. These decreases represent a continuation of reductions that commenced in 2002.

Extension of carry-forward for Tax Credit Programs: The 7-year carry-forward period was extended to 10 years for the following tax credit programs:
- Manufacturing Investment Tax Credit;
- Research and Development Tax Credit; and
- Community Enterprise Development Tax Credit.
Film & Video Production Tax Credit enhancements:
- Credit extended to March 1, 2008.
- A frequent filming incentive for returning producers will now be provided.
- A new incentive is introduced to encourage production activity throughout Manitoba
- The restriction that corporations cannot hold or be associated with a corporation that holds a CRTC broadcast license is removed.

Corporation Income Tax Rate – General rate reduced to 15.5% in 2004, and will be reduced further to 15.0% in 2005. The small business rate was reduced to 5%. The income threshold at which small businesses are eligible for the reduced rate was increased to $360,000 for 2004 and $400,000 for 2005.
Corporations Capital Tax – The $5 million exemption was changed to a deduction, which will benefit all Manitoba corporations.
Manufacturing Investment Tax Credit – Extended to 2006, and broadened to include equipment that allows firms to use energy more efficiently or to produce their own energy from renewable sources.
Manitoba Research and Development Tax Credit -- 15% of qualified R&D expenditures allowed as a non-refundable tax credit against Manitoba corporate income tax payable.
Co-operative Education Tax Credit -- Up to $1,000 per student work placement to encourage employers to provide work placements for post-secondary co-op education students.
Community Enterprise Development Tax Credit -- 30% personal income tax credit to support local investment.
Manitoba Equity Tax Credit - encourages local investors to purchase new shares of qualifying small- and medium-sized publicly traded Manitoba companies.

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