MAJOR TAX CREDITS in MANITOBA (FEDERAL and PROVINCIAL)

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					MAJOR TAX CREDITS in MANITOBA (FEDERAL and PROVINCIAL)


Manitoba Manufacturing Investment Tax Credit
Manitoba has a Manufacturing Investment Tax Credit. A tax credit of 10% on qualified property acquired before
January 1, 2012, reduces Manitoba tax payable. The qualified property must be used in Manitoba primarily for
manufacturing or processing goods for sale or lease.

The Manufacturing Investment Tax Credit extends the definition of qualified property to include new equipment
under class 43.1 purchased between April 22, 2003 and December 31, 2011. Qualified property under Class 43.1
that was moved under Class 43.2 as a result of the 2005 federal budget continues to qualify for this credit.

Effective March 9, 2005, qualified property includes used buildings, machinery and equipment made available for
use in manufacturing or processing goods for sale or lease.

An unused credit can be carried back to the three previous tax years (ending after April 22, 2003, for Class 43.1)
from the tax year that you acquired the property. For tax years ending before 2004, the unclaimed credit can also
carry forward to the seven tax years that follow the tax year in which the property was acquired. For credits earned
in tax years ending after 2003, the carry-forward period is extended to ten years.

The refundable portion of the Manufacturing Investment Tax Credit is increased from 50% to 70% for qualified
property acquired on or after January 1, 2008. The credit is also extended to December 31, 2011.
For more information about the refundable credit, please contact:

Federal Provincial Relations and Research Division
910 - 386 Broadway
Winnipeg, MB R3C 3R6
Phone: (204) 945-3757
Fax: (204) 945-5051
Website: www.gov.mb.ca/finance/fedprov/index.html

Manitoba Film and Video Production Tax Credit
The Manitoba Film and Video Production Tax Credit is a refundable corporate income tax credit available to
qualifying producers of eligible Manitoba productions and co-productions.

For productions commencing principal photography after 2007, the Manitoba Film and Video Production Tax
Credit will be enhanced with the introduction of a new 5% Manitoba Producer Bonus, based on eligible salaries
where a Manitoba resident receives credit as a Producer on an eligible film. In addition, the Frequent Filming
Bonus for returning producers is increased from 5% to 10% of eligible salaries.

Additional enhancements include: the percentage of eligible salaries paid to non-residents for work performed in
Manitoba that is eligible for the credit is increased from 20% to 30% of eligible salaries paid to Manitobans; and the
current requirement that non-residents train Manitobans working on an eligible film will be redesigned to emphasize
transfer of skills to Manitoba technical crew members, regardless of the residency of the person who provided the
training.

The maximum film tax credit when including the Manitoba Producer Bonus, Rural and Northern Incentive, and
Frequent Filming Bonus is now 65%.
MAJOR TAX CREDITS in MANITOBA (FEDERAL and PROVINCIAL)
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The Department of Competitiveness, Training and Trade and Manitoba Film and Sound jointly administer the Film
and Video Production Tax Credit
For more information on the Film and Video Production Tax Credit contact:

The Manitoba Film & Sound Recording Development Corporation
410 - 93 Lombard Avenue
Winnipeg MB R3B 3B1
Phone: (204) 947-2040
Fax: (204) 956-5261
Email: explore@mbfilmsound.mb.ca

Interactive Digital Media Tax Credit

The Interactive Digital Media Tax Credit is introduced to support qualifying corporations that develop and produce
eligible interactive digital media projects in Manitoba. The refundable tax credit is equal to 40% of the remuneration
paid to Manitobans on eligible projects approved by the Department of Science, Technology, Energy and Mines.
The maximum tax credit on an eligible project is $500,000. Projects that begin prototyping and product
development after April 9, 2008 and before 2011 will qualify for the credit.

A qualifying company must be a taxable Canadian corporation with a permanent establishment in Manitoba. The tax
credit will be processed as part of a qualifying company’s annual income tax return and administered by the Canada
Revenue Agency. This tax credit replaces the Manitoba New Media Production Grant, which is available for
projects developed and produced prior to April 10, 2008. Project eligibility under the tax credit builds upon the
criteria under the Grant.
For more information on the Interactive Digital Media Tax Credit contact:

Knowledge Enterprise Branch
Manitoba Science, Technology, Energy and Mines
1030 - 259 Portage Avenue
Winnipeg, MB R3B 3P4
Telephone: 204-945-0589
Fax: 204-945-3977
Email: newmediainquiries@gov.mb.ca

RESEARCH AND DEVELOPMENT TAX CREDITS

Federal Scientific Research and Experimental Development (SR&ED) Tax Incentive Program
The federal Income Tax Act permits a 100% deduction of SR&ED qualified expenditures from income. All
qualifying expenditures form a "pool" which is increased by SR&ED expenditures and diminished by government
or non-government assistance received in relation to these activities. Current and capital expenditures incurred in
Canada, and current expenditures incurred outside Canada, are added to the pool.

Expenditures incurred in Canada may be deducted in the year incurred or carried forward indefinitely. Current
MAJOR TAX CREDITS in MANITOBA (FEDERAL and PROVINCIAL)
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expenditures incurred outside Canada can only be deducted in the year incurred. For purposes of calculating the
amount of the SR&ED deduction in a given year, the "pool" of qualified expenditures is adjusted yearly and
includes all prior years and current year expenses, less all assistance received or receivable for current or previous
years in that
year, less all research and development related tax credits claimed in previous years.

Provincial research and development (R&D) credits reduce the SR&ED pool in the year received while federal tax
credits reduce the pool in the following year. If the balance of the SR&ED pool is negative, the excess is treated as
income for the year.

Summary of Federal SR&ED Tax Credits
                                                                 Rates (%)            Refundability

                                                                                 Current           Capital

Individuals and Unincorporated Businesses                         20%             None              None

Canadian Controlled Private Corporations:

• Taxable Income less than $200,000

  • Expenditures under $2 million                                 35%             100%              40%

  • Expenditures over $2 million                                  20%             40%               40%

• Taxable Income over $200,000                                    20%             None              None

Large Corporations                                                20%             None              None


Unused tax credits are eligible for a carry-forward of up to seven years and a carry-back of up to three years.

When a corporation is not taxable in a given year and wishes to maximize the refundable federal tax credit, it may
choose to renounce its right to the provincial tax credit.

For more information please contact:

Scientific Research and Experimental Development (SR&ED) Tax Incentive Program
Canada Revenue Agency
Phone: (204) 983-3918
Website: www.ccra-adrc.gc.ca/taxcredit/sred/

Manitoba Research and Development Tax Credit

To encourage research and development in Manitoba, the Research and Development Tax Credit provides a 20%
non-refundable tax credit applied against Manitoba corporate income tax payable. Eligible corporations must incur
MAJOR TAX CREDITS in MANITOBA (FEDERAL and PROVINCIAL)
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qualifying scientific research and development expenditures (as defined for federal income tax purposes) in
Manitoba.
The Manitoba R&D Tax Credit is administered by Canada Customs and Revenue Agency, and firms eligible for the
provincial credit will also be eligible for the federal Scientific Research and Experimental Development Tax Credit,
which may be refundable in certain circumstances.

The amount deductible against Manitoba income tax will be lesser of the Manitoba R&D Tax Credit and the
Manitoba Corporate Income Tax otherwise payable. Any unused credit will be available for carry-forward for up to
ten years, and carry-back for up to three years.

The Manitoba R&D Tax Credit will reduce qualified expenditures for the purposes of the Federal Income Tax Act,
including the refundable Investment Tax Credit. Where a corporation does not anticipate having taxable income and
prefers to make use of the refundable Federal tax credit provisions, it may renounce its rights to the provincial credit
(in whole or in part) in order to maximize its Federal refund.
For more information please contact:

Federal Provincial Relations and Research Division
910 - 386 Broadway
Winnipeg, MB R3C 3R6
Phone: (204) 945-3757
Fax: (204) 945-5051
Website: www.gov.mb.ca/finance/fedprov/


Source: Manitoba Finance, 2008                                                                                   F078