If you are a manufacturing and processing corporation with business in Saskatchewan, you may qualify for a manufacturing and processing tax credit.
Saskatchewan Manufacturing and Processing Profits Tax Reduction
The Manufacturing and Processing (M&P) Profits Tax Reduction applies to firms in the manufacturing and processing industry. Eligible corporations can reduce their Saskatchewan income tax rate on Canadian manufacturing and processing profits by as much two percentage points. Saskatchewan-based firms with a high allocation of income to Saskatchewan will receive a larger tax reduction than firms with a low allocation of income.
The reduction is administered by the Canada Revenue Agency. Corporations must complete Schedule 404 in the T2 Corporation Income Tax return. Credits will be applied directly against any Saskatchewan Income Tax payable calculated on the T2 return.
Manufacturing and Processing Investment Tax Credit
The Saskatchewan Investment Tax Credit (ITC) for M&P provides M&P corporations with a refundable tax credit for expenditures made on qualifying machinery and equipment that is made available for use in Saskatchewan.
The M&P ITC for qualifying new equipment is administered by the Canada Revenue Agency on behalf of Saskatchewan. It may be claimed by including a completed Schedule 402 with the annual T2 Corporate Income Tax Return.
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.
Manufacturing and Processing Exporter Tax Incentive
The M&P Exporter Tax Incentive provided non-refundable tax credits to eligible corporations that expanded the number of M&P-related full-time employees above the number that were employed in 2014. Eligible businesses were those that derived at least 25 per cent of revenues from export to the rest of Canada or internationally of their manufactured goods each year and that:
- "manufactured or processed" goods for sale as defined in the federal Income Tax Act; or
- were principally involved in the commercial development of "new economy" products for export, including interactive digital media products and creative industry products.
This program ended as of December 31, 2023. Applicants with a Certificate of Eligibility for the 2023 taxation year may submit a claim form for unused credits.
Apply
Apply for the Manufacturing and Processing Investment Tax Credit on Used Equipment