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The Saskatchewan
Manufacturing and Processing Profits Tax Reduction reduces
the provincial general corporate income tax rate to as
low as 10 per cent on Canadian manufacturing and processing
profits. This incentive is claimed on schedule 404 on
the federal T2 Corporation Income Tax return. Saskatchewan-based
firms with a high allocation of income to Saskatchewan
receive a significant reduction in their corporate income
tax rate.
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| The Saskatchewan
Investment Tax Credit (ITC) for Manufacturing and Processing
(M&P) is available to all M&P corporations filing
a T2 Corporation Income Tax Return (schedule 402) with
some allocation of taxable income to Saskatchewan. The
credit was introduced as a non-refundable income tax credit
designed to encourage plant and equipment investment for
use in M&P activities in Saskatchewan. The ITC is
determined as a percentage of the total capital cost of
eligible new and used M&P building, machinery and
equipment purchases made during the year, including installation
costs. The ITC rate will depend on the acquisition date
of the eligible property.
The
2006 Budget announced the conversion of the ITC into
a refundable tax credit for all eligible capital acquisitions
occurring after April 6, 2006. Unclaimed ITC balances
earned prior to April 7, 2006 will have their carry
forward period extended from seven to ten years.
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The Research
and Development (R&D) Credit encourages R&D activity
in Saskatchewan. The credit is equal to 15 per cent of
qualifying R&D expenditures incurred in Saskatchewan.
Activities such as operations research, engineering or
design and computer programming are generally eligible,
but market research, sales, promotion and quality control/routine
testing are not. The credit reduces Saskatchewan corporate
income taxes otherwise payable and unused amounts may
be carried forward for ten taxation years or carried back
three taxation years.
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The Saskatchewan
Film Employment Tax Credit is intended to assist Saskatchewan's
film industry in creating new employment opportunities
for Saskatchewan residents involved in this industry.
Effective January 1, 2006, the tax credit increased from
35 per cent of qualified Saskatchewan labour costs to
45 per cent and an additional 5 per cent tax credit toward
salaries of Saskatchewan residents, when hired in six
out of ten key positions, was also introduced. Eligible
labour expenditures will be limited to 50 per cent of
the total cost of a film production. An additional 5 per
cent tax credit will also apply for qualifying productions
completed in locations more than 40 kilometres from Regina
or Saskatoon.
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| The Royalty
Tax Rebate (RTR) helps to offset the provincial portion
of income taxes that are payable as a result of the federal
government's decision to disallow provincial royalties
and similar taxes as deductions in determining taxable
income. As a consequence of the federal government's initiative
to re-introduce full deductibility of provincial resource
royalties for federal and provincial income tax purposes,
the Saskatchewan Royalty Tax Rebate is no longer necessary
and will be allowed to wind down. Commencing January 1,
2007, the carry forward period for any outstanding Royalty
Tax Rebate balances will be limited to seven years.
The Saskatchewan Royalty
Tax Rebate for corporations is administered by Canada
Revenue Agency (CRA) as a deduction from Saskatchewan
corporate income tax payable. For each taxation
year, corporations eligible for the RTR must submit
one copy of the Saskatchewan Royalty Tax Rebate Calculation
Form for Corporations (Schedule 400) to their income
tax return. A duplicate copy must be sent to Saskatchewan
Finance, Taxation and Intergovermental Affairs Branch,
9th Floor, 2350 Albert Street, Regina, Saskatchewan,
S4P 4A6. Copies of Schedule 400 may be obtained from
any office of the CRA or from the Government of Canada
website.
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©2006
Saskatchewan Finance
Privacy
Statement
Security Policy
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Last
updated:
April 4, 2006
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