Saskatchewan Bill 127 received first reading on April 23, 2018.
Bill 127 introduces two non-refundable tax credits that were announced in Saskatchewan's 2018 provincial budget-the Saskatchewan Technology Start-up Incentive (STSI) and the Saskatchewan Value-added Agriculture Incentive (SVAI). Bill 127 harmonizes the province's corporate tax legislation for claiming the small business deduction with 2016 federal amendments to the small business deduction rules, and also includes several other measures announced in the province's 2018 budget.
The corporate income tax measures in Bill 127 are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) on April 23, 2018, the date the bill received first reading (as Saskatchewan has a majority government).
Corporate tax measures
Saskatchewan Value-added Agriculture Incentive credit
Bill 127 introduces the new 15% non-refundable SVAI tax credit on qualifying new capital expenditures for certain facilities involved in developing qualifying agricultural products (or by-products or waste) into a new or upgraded products. Qualifying capital expenditures made on or after January 1, 2018 are eligible for this tax credit. Redemption of the tax credit will be limited to 20% in year one after the facility begins operations, 30% in year two, and 50% in year three. Unused tax credit amounts can be carried forward to subsequent taxation years, up to the tenth year after the facility begins operations. The program will sunset after December 31, 2022.
Further details on administrative processes related to the credit are included in Saskatchewan's Bill 125, which received first reading April 19, 2018. More details will be provided by regulation.
Saskatchewan Technology Start-up Incentive
Bill 127 also introduces the framework for the new 45% non-refundable STSI tax credit for qualifying individuals and corporations making new investments in eligible small businesses. This credit was announced in Saskatchewan's 2018 budget and will be available to qualifying early stage technology start-ups under a new two-and-a-half year pilot program. Using this credit, eligible investors may claim up to $140,000 in tax benefits per year; unused tax credit amounts may be carried forward for up to three taxation years after the year the tax credit certificate is issued.
Further details on the STSI tax credit are included in Saskatchewan's Bill 129, which received first reading on April 30, 2018. More details will also be provided by regulation.
For more information, contact your KPMG adviser.
Information is current to May 01, 2018. 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