Manitoba data processing investment tax credits

• Refundable tax credit equal to 4.5% of the capital cost of a new data processing building.
• Refundable tax credit equal to 8% of the capital cost of new or refurbished data processing centre property.
• Refundable tax credit equal to 8% of the cost of data processing property purchased or leased in the year, with a minimum total cost of $10 million.

• The applicant must be a corporation with a permanent establishment in Manitoba.
• For the operator credit, the corporation's primary business activity, including that of affiliates, must be data processing.
• Eligible property must be acquired for use in a data processing centre in Manitoba and must be available for use.
• For the building lessor credit, the property must be leased to an eligible corporation at arm's length.
• For the property credit, the corporation must purchase or lease data processing property for use in Manitoba, and the total amount purchased or leased in the year must meet the program's minimum threshold.

Who is eligible?

• Corporations with a permanent establishment in Manitoba whose primary business activity, including affiliates, is data processing
• Corporations with a permanent establishment in Manitoba that acquire or lease data processing property for use in a Manitoba data processing centre
• Corporations that build or acquire new data processing centres in Manitoba and lease them to eligible corporations (at arm's length)
• Partnerships involved in building data processing centres (corporations can claim their proportionate share of the credit)

Who is not eligible

• Corporations that do not have a permanent establishment in Manitoba.

Eligible expenses

• Capital cost of new data processing buildings.
• Capital cost of new or refurbished data processing centre property.
• Cost of data processing property purchased or leased for use in a data processing centre in Manitoba (minimum $10 million total annual cost required).

Eligible geographic areas

• Manitoba

• Step 1: Complete Schedule 392Fill out Schedule 392, Manitoba Data Processing Investment Tax Credits, with details of your eligible property and calculations for the credit.
• Step 2: Prepare Tax DocumentationInclude Schedule 392 with your corporate tax return.
• Enter the total credit amount on line 324 of Schedule 5, Tax Calculation Supplementary – Corporations.
• Step 3: Submit Corporate Tax ReturnFile your complete corporate tax return, including all relevant schedules, to the Canada Revenue Agency or appropriate tax authority.

• The Manitoba data processing investment tax credits have been eliminated for property purchased or leased after April 11, 2017, with specific conditions for replacement property acquisitions.
• Corporations in partnerships can claim their proportional share of credits if an election with written consent from the partnership is filed with their return.
• The credits are refundable, meaning companies may receive a refund if the amount exceeds their tax payable.
• Applicants are required to use Schedule 392 and indicate the claimed credit on Schedule 5 when filing their corporate tax return.