Yukon Manufacturing and Processing Profits Tax Credit
Highlights
This program is designed for businesses like yours, offering significant financial benefits. By participating, you can receive a 25% tax credit on your investments in eligible Yukon organizations. This means if you invest $100,000, you could get $25,000 back as a tax credit.
Key Benefits:
- Maximum claim of $25,000 per year
- Carry unused amounts back 3 years or forward 7 years
- Support for local businesses and the Yukon economy
This tax credit is a great way to reduce your tax burden while supporting local enterprises. It's straightforward to qualify, and the financial relief can help you reinvest in your business, hire more staff, or expand your operations.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- No repayment terms or interest rates apply, as this is a tax credit.
Eligible Expenses:
- Investments in eligible Yukon organizations.
- Expenses related to scientific research and experimental development.
- Contributions to recognized territorial political parties or candidates.
- Manufacturing and processing profits earned in the Yukon.
Use of Funds:
- The tax credit can be used to offset payable income tax.
- The credit is refundable if it exceeds your payable income tax.
Ineligible Uses:
- The funds cannot be used for personal expenses or investments outside of eligible Yukon organizations.
Fees:
- No fees are associated with applying for or receiving this tax credit.
Qualifications
- Must be an incorporated, private corporation.
- Must maintain a permanent establishment in the Yukon.
- Head office must be located in the Yukon.
- Must pay at least 25% of salaries and wages to Yukon residents.
Must not exceed $100 million in assets.
Disqualifications:
- Businesses exceeding $100 million in assets.
Description
This program offers your business a tax credit of 25% on the amount you invest in eligible Yukon organizations. This means if you invest $10,000, you get a $2,500 tax credit.
You can claim up to $25,000 in a single taxation year. If you don't use the full amount, you can carry it back for 3 years or forward for 7 years. This flexibility allows you to maximize your tax benefits over time.
To qualify, the Yukon organization you invest in must be a private corporation with its head office in the Yukon. They must also pay at least 25% of their salaries and wages to Yukon residents. This ensures your investment supports local businesses and the community.
Program Steps
Gather Required Documentation: Prepare the necessary documents for the application. You will need:
- Proof of Yukon residency (e.g., utility bill, driver's license).
- Proof of age (19 years or older).
- Corporate documents proving the business is an incorporated, private corporation.
- Evidence that the business maintains a permanent establishment in the Yukon.
- Proof that the head office is located in the Yukon.
- Payroll records showing that at least 25% of salaries and wages are paid to Yukon residents.
- Financial statements to confirm the business does not exceed $100 million in assets.
Complete the Application Form: Fill out the application form for the Yukon Business Investment Tax Credit. Ensure all sections are completed accurately.
Submit the Application: Send the completed application form along with the required documentation to the appropriate government office or online portal as specified.
Await Confirmation: Wait for confirmation from the government office that your application has been received and is being processed.
Receive Tax Credit Certificate: If your application is approved, you will receive a tax credit certificate (YSBITC-1) from the Government of Yukon.
Claim the Tax Credit: Use the tax credit certificate to claim the tax credit on your income tax return. Ensure you include the amount of the tax credit shown on the YSBITC-1 form.
Keep Records: Maintain all documentation and correspondence related to your application and tax credit for future reference or audits.
