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Recent Strategic Tax Incentives
Tax Incentives: Recent |
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Summary of Strategic Tax Incentives announced in the last three Manitoba budgets.
2007
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Corporation Income Tax: The general rate is reduced to 14.0% in 2007, and will be further reduced to 13.0% in 2008, and to 12.0%* in 2009. The small business rate is reduced to 3.0% in 2007, and will be further reduced to 2.0% in 2008 and to 1.0% in 2009*.
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Corporation Capital Tax: In 2008, the capital tax rate for corporations with taxable paid-up capital between $10 million and $20 million will be reduced to 0.2% from 0.3%; and the rate for corporations with taxable paid-up capital over $21 million, will be reduced to 0.4% from 0.5%. There is a notch provision for total paid-up capital between $20 million and $21 million. The 2007 Budget commits to eliminate the general CCT, except for Crown corporations, by December 31, 2010.
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Capital Cost Allowance for manufacturing equipment: CCA for manufacturing equipment is changed from 30% declining balance to 50% straight line on assets acquired after March 18, 2007 and before 2009; CCA for Manufacturing buildings is increased from 4% to 10% on assets acquired after March 18, 2007.
- Health and Post Secondary Education Levy (Payroll Tax): Effective January 1, 2008, the exemption threshold will increase to $1.25 million, and the $2.0 million threshold will increase to $2.5 million.
Tax Credit Program adjustments:
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Manufacturing Investment Tax Credit -- The refundable portion will be increased to 50% of earned credits for qualified property purchased on or after January 1, 2008.
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Green Energy Manufacturing Tax Credit -- A new 10% refundable credit for purchase of new equipment used to generate renewable energy
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Film & Video Production Tax Credit -- is extended to March 1, 2011.
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Community Enterprise Development Tax Credit -- is broadened to include a new 30% provincial non-refundable income tax credit for individuals and corporations who invest directly in emerging enterprises that require larger amounts of investment capital than community ownership could provide. The credit will apply to eligible securities acquired on or after January 1, 2008.
* Subject to requirements of Balanced Budget legislation
2006
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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:
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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.
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Co-operative Education Tax Credit -- A parallel incentive is now offered to unincorporated employers.
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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
2005
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.
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