ANNOUNCEMENT 18 Mar 2015In March 2015, the government of Canada/Province of Saskatchewan announced a change in the tax legislation for exporters.
NUMBER OF INTERVENTIONS
On March 18, 2015, SaskatchewanMinister of Finance Ken Krawetz proposed the province's budget for Fiscal Year 2015-16. One innovation in that budget that has already taken effect is a Manufacturing and Processing Exporter Tax Incentive. The incentive will provide non-refundable tax credits to eligible corporations that expand the number of M&P-related full time employees above the number that were employed in 2014.
Eligible businesses are those that derive at least 25% of revenues from the export to the rest of Canada or internationally of their manufactured goods each year and that either "manufacture or process" goods for sale as defined in the federal Income Tax Act; or are principally involved in the commercial development of "new economy" products for export, including interactive digital media products and creative industry products.
The incentive will offer an eligible business non-refundable tax credits equal to $3,000 in respect of each incremental full-time employee for each of the 2015 through 2019 taxation years.
The M&P Exporter Tax Incentive will also provide non-refundable tax credits to eligible corporations that expand the number of their full-time employees who primarily conduct activities that are typically considered to be "head office" functions. This portion of the incentive will offer an eligible business non-refundable tax credits equal to $10,000 in respect of each incremental full-time "head office" employee for each of the 2015 through 2019 taxation years.
This incentive will be administered by the Saskatchewan Ministry of Finance. An eligible corporation will file its corporate income tax return and pay its normal tax liability to the Canada Revenue Agency and then claim the tax rebate by applying to the Saskatchewan Ministry of Finance.
A corporation will also be required to apply to the Ministry of Economy for a certificate of eligibility confirming the corporation to be an eligible manufacturing exporter or creative industry. The certificate of eligibility received will then be remitted as part of the rebate application to the Ministry of Finance.
Non-refundable tax credits may be carried forward for a period of five additional years from the year in which they were earned.