This new incentive is a “patent box” regime for taxable income earned from the commercialization of intellectual property in Saskatchewan.
This incentive is available for a broad range of intellectual property, including patents, plant breeder rights, trade secrets and copyrights (e.g., computer programs and algorithms). Companies that are eligible for the new tax incentive should submit an application to ensure they fully benefit from the program.
In its 2017 provincial budget, Saskatchewan announced the new Saskatchewan Commercial Innovation Incentive. This patent box regime is intended to encourage companies to develop the results of R&D work carried out in Saskatchewan that led to the granting of a patent. Specifically, this program will reduce the provincial corporate income tax rate to 6% on taxable income earned from the commercialization of qualifying IP in the province for 10 years, which can be further extended to 15 years for qualifying IP substantially developed in Saskatchewan. The effective date of this incentive is January 1, 2017.
In the budget, Saskatchewan also unveiled a new refundable 10% research and development tax credit. For details, see TaxNewsFlash-Canada 2017-27, "Saskatchewan Strengthens R&D Support".
Any corporation can apply to the program, provided it is solely engaged in the development and commercialization of qualifying IP, is not a corporation exempt from federal income tax and it successfully completes a scientific eligibility test and an economic eligibility test.
How we can help
We can assist in analyzing the potential benefits and in completing/reviewing the extensive application form. For details, contact Ed Zacharuk (604-691-3201) or Jacqueline Gustafson (604-691-3528).
Information is current to September 12, 2017. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500