Saskatchewan Manufacturing and Processing Investment Tax Credit
No fixed amount
Tax Credit
Description:
The Saskatchewan Manufacturing and Processing (M&P) Investment Tax Credit (ITC) is available
to all M&P corporations filing a T2 Corporation Income Tax (CIT) return with some allocation of
taxable income to Saskatchewan. It is designed to encourage plant and equipment investment
for use in M&P activities in Saskatchewan. The ITC applies as a percentage of the total capital
cost of eligible building, machinery and equipment purchases.
Comments on Funding:
The percentage rate of the ITC matches the rate of the Saskatchewan Provincial Sales Tax (PST).
Therefore, for eligible purchases made:
a) after October 27, 2006, and before March 23, 2017, the ITC is equal to 5% of the total capital cost of the asset.
b) on or after March 23, 2017, the ITC is equal to 6% of the total capital cost of the asset.
Rolling deadline
Eligibility:
Applicants must:
1. be manufacturing and processing corporation, that meet these criteria:
a) have a permanent establishment in Saskatchewan;
b) have earned taxable income in Saskatchewan;
c) have Canadian manufacturing and processing profits in Saskatchewan.
2. have expenditures made on qualifying machinery and equipment that is made available for use in Saskatchewan.
Application Steps:
Applicants must:
For New Equipments qualifying:
1. Submit completed Schedule 402 with the annual T2 Corporation Income Tax Return.
For Used Equipments qualifying:
2. completing and submitting a Manufacturing and Processing Investment Tax Credit on Used Equipment application, including:
• Copies of purchase invoices;
• Financial statements;
• T2 Corporation Income Tax Return; and
• Documentation verifying PST was paid on all taxable items.
3. Submit applications to:
Ministry of Finance
Revenue Division
Box 200
Regina SK S4P 2Z6
Documentation Needed:
Applicants must submit:
1. A complete set of all statements, schedules, returns and other information submitted with the T2 Corporation Income Tax Returns for the purposes of the Income Tax Act (Canada), including the T2 return.
2. Documentation to verify the purchase price of the asset, proof that Provincial Sales Tax has been paid, and supporting documentation of other expenses incurred to install or make the property initially available for use must be available for audit verification.
3. A brief description of what each piece of qualified property is used for.
Other Things to Note:
1. The M&P ITC for qualifying new equipment is administered by the Canada Revenue Agency on behalf of Saskatchewan.
2. The M&P ITC for qualifying used equipment on which PST has been paid is administered by the Ministry of Finance. It must be claimed by applying directly to Saskatchewan Finance.
3. Both sustaining capital and expansion capital investments qualify, as well as capital investments made in respect of both new and used equipment investments.
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Maurice
