Saskatchewan Commercial Innovation Incentive (SCII)
No fixed amount
Tax Credit
Description:
The Saskatchewan Commercial Innovation Incentive (SCII or ‘Patent Box’) is a new-growth tax incentive that offers eligible corporations a reduction of the provincial Corporate Income Tax Rate (CIT) to six per cent for 10 consecutive years for eligible corporations that commercialize their qualifying intellectual property in Saskatchewan. Companies can extend the benefit period to 15 years if at least 50 per cent of the related research and development (R&D) in advance of commercialization occurred and was conducted in Saskatchewan.
This new growth tax incentive is open to any company, operating in any sector, from anywhere in the world, regardless of where or when the R&D for the qualifying intellectual property occurred.
The first of its kind in North America, this patent box style incentive applies to a wide variety of intellectual property types, including patents, plant breeders’ rights, trade secrets and copyrights (computer programs and algorithms).
The SCII is administered by the Ministry of Trade and Export Development. The Industrial Research Assistance Program, a division of the National Research Council, will provide technical assessment services for the SCII application’s scientific eligibility evaluation.
Comments on Funding:
Rolling deadline
Eligibility:
Applicants must:
1. be companies operating in any sector, from anywhere in the world, regardless of where or when the R&D for the qualifying intellectual property occurred;
2. own or have license qualifying intellectual property that is linked to the commercialization of new goods, services, or processes in Saskatchewan. The qualifying IP/good(s), service(s), and process(es) must meet one of the following definitions:
a) The proposed innovation has no equivalent in the Canadian marketplace or is an exceptional advance on the current state of the art in Canada;
AND/OR,
b) The proposed innovation has unique features and benefits that offer exceptional differentiation from current competitive offerings in the Canadian marketplace and is sufficiently unique that the potential exists to create a competitive advantage or create a new market niche.
3. establish/identify an eligible corporation where the only sources of revenue are related to the commercialization of the qualifying intellectual property;
4. demonstrate new economic benefits to Saskatchewan by meeting two of the five economic benchmarks (these can be accumulative over any period of time):
a) $3 million in R&D expenditures in Saskatchewan (including labour costs) – consisting of new R&D, existing R&D pertaining to the qualifying intellectual property, or a combination of new and existing R&D;
b) 10 net new full-time employees;
c) $10 million in net new capital expenditures;
d) $3.5 million in new provincial CIT taxes paid; or
e) Propose a new economic benefit benchmark as pre-approved by the Ministry of Trade and Export Development.
4. be issued an SCICertificate.
Application Steps:
Applicants must:
1. prepare and submit the SCII – Application for Scientific Eligibility. If they have questions about the application process, refer to the SCII – Program Overview and Application Instruction or contact scii@gov.sk.ca. The Ministry of Trade and Export Development will provide information to submit the application form and related content through a secure online platform;
2. submit a SCII – Proposed New Economic Benefit Benchmark Form, should they seek to qualify a proposed new economic benefit benchmark;
3. receive a letter approving the company’s Scientific Eligibility from the Ministry of Trade and Export Development, If their company meets the scientific eligibility requirements;
4. establish/identify an eligible corporation that’s only sources of revenue are related to the commercialization of the qualifying intellectual property;
5. prepare and submit an SCII – Application for Economic Eligibility that demonstrates the corporation meets two of five economic benchmarks. If they have questions about the benchmarks or the form, refer to the SCII – Program Overview and Application Instructions or contact scii@gov.sk.ca;
6. If applicants’ corporation meets the economic benchmark test, then the Ministry of Trade and Export Development will provide them with a SCII Certificate of Eligibility approving their Economic Eligibility and indicating a 10 or 15-year program period.
7. Their corporation can begin the 10 or 15-year program period in any taxation year. In a claim year, file your T2 corporation income tax return with the CRA. Once the CIT return has been assessed and a T2 Notice of Assessment from the CRA has been received, complete an SCII – Claim Form and submit it to the Ministry of Finance, including a copy of the:
a) The SCII Certificate of Eligibility, as issued by the Ministry of Trade and Export Development;
b) Current year T2 Corporation Income Tax Return; and
c) Current year Notice of Assessment or Reassessment.
A claim form will need to be submitted for each year of the 10 or 15-year program period.
8. The Ministry of Finance will verify the claim form and provide:
a) A rebate calculated in accordance with program legislation; or
b) A written notice indicating that the corporation is not entitled to the rebate and the reasons for the determination.
9. Corporations with ongoing IP development and expansion can apply to qualify the new iterations of goods, services and processes tied to the original qualifying IP without re-applying to the program. Prepare and submit a SCII – Notice of Cascading and Forking Form to the Ministry of Trade and Export Development, who will provide a letter qualifying or disqualifying the new iteration(s).
Documentation Needed:
Applicants must submit:
1. a completed SCII – Claim Form;
2. the SCII Certificate of Eligibility, as issued by the Ministry of Trade and Export Development;
3. the current year T2 Corporation Income Tax Return;
4. the current year Notice of Assessment or Reassessment;
5. additional information, as requested.
Other Things to Note:
About the author
Maurice
