Provincial tax burden on businesses
“Saskatchewan has the lowest net business tax burden among the provinces according to a Conference Board of Canada report.”
- Regina Leader Post, May 2, 2016
Corporate tax incentives
Saskatchewan offers a refundable 10 per cent tax credit for research and development expenditures.
For manufacturing and processing equipment, there is a 6.8 per cent refundable investment tax credit. In addition, the Manufacturing and Processing Exporter tax incentive provides tax credits for expansion of full-time employees over 2014 baseline.
Saskatchewan Commercial Innovation (SCII)
This program will reduce the provincial Corporate Income Tax rate for eligible corporations to six per cent for a period of 10 years—on taxable income earned from the commercialization of a broad range of qualifying types of intellectual property in Saskatchewan. This includes patents, plant breeders’ rights, trade secrets and copyright (computer programs and algorithms).Eligible corporations will be able to extend the benefit period to 15 years if the majority of the related research and development has been conducted in the province. The SCII is open to any company in the world operating in any sector, regardless of where or when the research and development for the qualifying intellectual property occurred.
Saskatchewan Value-Added Agriculture Incentive (SVAI)
- The SVAI creates a 15 per cent non-refundable and non-transferable tax credit for new or existing value-added agriculture facilities that make a minimum capital investment of $10 million to expand productive capacity.
- To be eligible, a project must demonstrate that capital expenditures were made for the purpose of creating new productive capacity, or increasing existing, productive capacity.
- Redemption of the benefits is limited to 20 per cent in year one after the facility enters operation, 30 per cent in year two, and 50 per cent in year three.
Saskatchewan Technology Start-up Incentive (STSI)
Targeted to create the conditions for the continued rapid growth and success of newly emerging technology companies, this incentive will further strengthen the province’s innovation strategy by helping to retain technology start-ups in Saskatchewan.
- This two-year pilot program will offer a 45 per cent non-refundable tax credit for individual and corporate equity investments in eligible technology start-up businesses (ESBs) capped at a maximum annual benefit of $140,000 per investor.
- To be eligible, ESBs must be early stage technology-based companies located in Saskatchewan, with 50 employees or fewer and at least 50 per cent of those employees being in the province.
- Each ESB must successfully complete a technology assessment in order to be considered eligible, with more details to be provided when the program is launched later this year.
Corporate tax rates
Provinces and territories have two rates of income tax – a lower rate and a higher rate.
- Lower rate – The lower rate applies to the income eligible for the federal small business deduction.
- Higher rate – The higher rate applies to all other income.
|Province or territory||Lower rate||Higher rate|
|Newfoundland & Labrador||3.0%||15%|
|Prince Edward Island||4.5%||16%|