Saskatchewan Manufacturing and Processing Profits Tax Reduction
SK, Canada
Income tax reduction for manufacturing and processing in Saskatchewan
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|timelineUnspecified
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Manufacturing
grant_single|grantors
- Government of Saskatchewan
- Canada Revenue Agency (CRA)
- Ministry of Finance (SK)
grant_single|status
grant_card_status|open
grant_single_labels|preview
Corporation income tax is reduced by as much as 2% on Canadian manufacturing and processing profits, as reported on the T2 CIT return.
grant_single_labels|terms_and_conditions
This program offers tax reduction benefits to corporations engaged in manufacturing and processing activities in Saskatchewan, focusing on profits and investment in qualifying equipment. The program is designed to enhance the competitiveness of businesses while supporting substantial investments in the region.
- Reduction of the Saskatchewan income tax rate on Canadian manufacturing and processing profits by up to two percentage points.
- Application of credits directly against Saskatchewan Income Tax payable as calculated on the T2 Corporation Income Tax return.
- Refundable tax credit for expenditures on qualifying machinery and equipment, which is available to be used in Saskatchewan.
- Calculated as 6% of the total capital cost of eligible purchases, including Provincial Sales Tax (PST).
- The credit can be received as a rebate if the credit exceeds the corporation’s Saskatchewan income tax liability for the fiscal year.
- Non-refundable tax credits awarded for expanding the number of full-time employees beyond 2014 levels in eligible corporations that derive a minimum of 25% of their revenues from exporting manufactured goods.
grant_single_labels|projects
The Saskatchewan Manufacturing and Processing Profits Tax Reduction supports projects or activities that increase manufacturing and processing profitability through tax incentives. Eligible activities specifically relate to using equipment and expanding employment in export-oriented businesses.
- Reducing the income tax rate for corporations in the manufacturing and processing sectors operating in Saskatchewan.
- Applying tax reductions based on the allocation of income to Saskatchewan.
- Investment in new machinery and equipment for use in manufacturing and processing activities within Saskatchewan.
- Purchase of qualifying used manufacturing and processing equipment on which PST has been paid.
- Cutting taxes for businesses that increase their number of full-time employees in manufacturing and processing since 2014, focusing on exports.
grant_single|admissibleProjectsExample
$ 20,000
Upgrading technology infrastructure in a local food processing plant
$ 40,000
Establishing a green technology research lab for renewable energy
$ 20,000
Creating an advanced recycling program for electronic waste
$ 18,000
Developing a sustainable packaging line using recycled materials
$ 20,000
Launching a new line of organic skincare products
grant_single_labels|admissibility
To be eligible for the Saskatchewan Manufacturing and Processing Investment Tax Credit, businesses must satisfy specific requirements regarding their operations and investments.
- The corporation must file a T2 Corporation Income Tax (CIT) return with some allocation of taxable income to Saskatchewan.
- The corporation must engage in manufacturing and processing activities as defined by the federal Income Tax Folio S4-F15-C1.
- A corporation must obtain more than 10% of its gross revenues from manufacturing and processing activities to qualify as an M&P corporation.
- The corporation must purchase qualifying new or used equipment for manufacturing and processing use in Saskatchewan, with PST paid on such equipment.
- The equipment must be qualified under subsections 127(9), 127(11), and 127(11.1) of the federal Income Tax Act for new equipment, and subsection 61.1(1) of The Income Tax Act, 2000 (Saskatchewan) for used equipment.
- The equipment must primarily be used for manufacturing or processing goods for sale or lease in Canada.
grant_eligibility_criteria|who_cannot_apply
This grant excludes certain companies and industries due to their status or main activity. The restrictions focus on ensuring that only those engaged in manufacturing and processing activities benefit from the grant.
- Farming companies.
- Fishing operations.
- Logging businesses.
- Construction firms.
- Oil and gas extraction and processing companies.
- Mineral extraction and processing activities.
- Corporations whose primary activity is not manufacturing and processing.
grant_eligibility_criteria|eligible_expenses
The grant covers eligible expenses related to purchasing new or used equipment for manufacturing and processing activities in Saskatchewan.
- Total capital cost of eligible building, machinery, and equipment purchases, including PST.
- Costs associated with new machinery and equipment, which have not been used or acquired for any other purpose before acquisition.
- Qualified property for the purposes of the ITC as defined in federal and provincial tax acts.
- Eligible purchases or leases of equipment available for use in Saskatchewan primarily for manufacturing and processing goods for sale or lease.
grant_eligibility_criteria|zone
This grant specifically targets companies operating within the province of Saskatchewan. Eligibility and administration are managed according to the province's guidelines to support regional economic development.
- Companies operating within the province of Saskatchewan, Canada.
grant_single_labels|register
- Step 1: Review Eligibility Requirements
- Carefully read the Saskatchewan Manufacturing and Processing Investment Tax Credit Information Bulletin to ensure your corporation is eligible for the grant.
- Step 2: Prepare Required Documents
- Gather copies of purchase invoices for qualifying equipment.
- Prepare financial statements that reflect the corporation's M&P activities.
- Complete a T2 Corporation Income Tax Return for the relevant taxation year.
- Compile documentation verifying that PST was paid on all eligible used equipment.
- Step 3: Complete Application Form
- For new equipment, complete Schedule 402 and include it with your T2 CIT Return.
- For used equipment, fill out the Manufacturing and Processing Investment Tax Credit Application Form available online.
- Step 4: Submit Application
- Submit the application for new equipment with your annual T2 Corporate Income Tax Return to the Canada Revenue Agency.
- Send your completed form for used equipment along with all documentation by mail to the Ministry of Finance, Revenue Division, PO Box 200, Regina SK S4P 2Z6.
- Step 5: Await Confirmation
- After submitting, wait for confirmation or further correspondence from the relevant authority.
grant_single_labels|otherInfo
Here are additional relevant details for this grant:
- The Investment Tax Credit (ITC) is refundable, allowing corporations to receive rebates if the ITC exceeds the Saskatchewan Corporate Income Tax liability for the year.
- The ITC engages with the definition of manufacturing and processing according to federal standards, ensuring standardized criteria across jurisdictions.
- Applications for the ITC on Used Equipment must be submitted within a specified timeframe, within three years of the taxation year end.
- It is important to submit accurate documentation, as the Ministry of Finance will require verification of PST payments and usage of equipment.
grant_single_labels|contact
sasktaxinfo@gov.sk.ca
1-800-667-6102
