Saskatchewan Manufacturing and Processing Profits Tax Reduction
Highlights
This program is designed specifically for businesses like yours in the manufacturing and processing industry. By applying, you can benefit from significant tax reductions and credits that will directly impact your bottom line. You can reduce your Saskatchewan income tax rate on Canadian manufacturing and processing profits by up to two percentage points. This means more of your hard-earned money stays with your business.
What You Get:
- Tax reductions on manufacturing and processing profits
- Refundable tax credits for expenditures on qualifying machinery and equipment
- Non-refundable tax credits for expanding your workforce and increasing exports
These incentives are better than other financing options because they are administered by the government, ensuring reliability and ease of access. Approval can help you reinvest in your business, purchase new or used equipment, and expand your operations. Qualifying is straightforward, and the benefits are substantial, making this program an excellent opportunity for your business.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- This program does not involve repayment or interest rates, as it is a tax credit.
Eligible Expenses:
- Expenditures on qualifying machinery and equipment used in manufacturing and processing.
- Costs associated with expanding the number of full-time employees in manufacturing and processing roles.
Use of Funds:
- Funds can be used for:
- Purchasing new or used machinery and equipment.
- Expanding manufacturing and processing operations.
- Increasing the workforce in manufacturing and processing roles.
Restrictions:
- Funds cannot be used for non-manufacturing or non-processing related expenses.
- The tax credit is not applicable to general operational costs outside the scope of manufacturing and processing.
Fees:
- There are no fees associated with applying for or receiving this tax credit.
Qualifications
- Must be a manufacturing and processing corporation.
- Must have business operations in Saskatchewan.
- Must complete Schedule 404 in the T2 Corporation Income Tax return for the Manufacturing and Processing Profits Tax Reduction.
- Must complete Schedule 402 in the T2 Corporate Income Tax Return for the Manufacturing and Processing Investment Tax Credit on new equipment.
- Must apply directly to Saskatchewan Finance for the Manufacturing and Processing Investment Tax Credit on used equipment.
- Must derive at least 25% of revenues from the export of manufactured goods to the rest of Canada or internationally.
- Must expand the number of manufacturing and processing-related full-time employees above the number employed in 2014 for the Manufacturing and Processing Exporter Tax Incentive.
- Must "manufacture or process" goods for sale as defined in the federal Income Tax Act.
Alternatively, must be principally involved in the commercial development of "new economy" products for export, including interactive digital media products and creative industry products.
Disqualifications:
- Businesses not involved in manufacturing and processing.
- Businesses not operating in Saskatchewan.
- Businesses that do not derive at least 25% of revenues from exporting manufactured goods.
- Businesses that do not expand their full-time employee count above the 2014 level for the Exporter Tax Incentive.
Description
This program offers your business valuable tax credits and reductions. You can reduce your Saskatchewan income tax rate by up to two percentage points on profits from manufacturing and processing. This means more of your hard-earned money stays in your business.
You can also get a refundable tax credit for new machinery and equipment used in Saskatchewan. This helps you upgrade your operations without a huge financial burden. If you buy used equipment and pay PST, you can apply for a tax credit directly from the Ministry of Finance.
If your business exports goods and increases full-time employment, you can receive non-refundable tax credits. This is especially beneficial if at least 25% of your revenue comes from exporting manufactured goods. This incentive supports your growth and expansion efforts.
These benefits can significantly reduce your tax burden and support your business growth.
Program Steps
Gather Required Documentation: Prepare the necessary documents for your application. These include:
- Financial statements
- Business plan
- Details of intended use of funds (e.g., quotes for equipment or renovation costs)
- Proof of revenue from exports (if applicable)
- Employment records (if applying for the Exporter Tax Incentive)
Complete Schedule 404: Fill out Schedule 404 in the T2 Corporation Income Tax return for the Manufacturing and Processing Profits Tax Reduction.
Complete Schedule 402: Fill out Schedule 402 in the T2 Corporation Income Tax return for the Investment Tax Credit on new equipment.
Apply for Used Equipment Credit: For used equipment, apply directly to Saskatchewan Finance. Ensure PST has been paid on the equipment.
Submit Exporter Tax Incentive Application: If applying for the Exporter Tax Incentive, submit the necessary forms and documentation to demonstrate increased full-time employment and export revenue.
Review and Submit Application: Double-check all forms and documentation for accuracy. Submit your completed application to the appropriate government agency or financial institution.
Follow Up: After submission, follow up with the relevant agency to confirm receipt and address any additional requirements or questions they may have.
