Saskatchewan Budget Bill Receives First Reading | KPMG | GLOBAL

Saskatchewan Budget Bill Receives First Reading

Saskatchewan Budget Bill Receives First Reading

Saskatchewan Bill 69 received first reading on April 13, 2017.

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Bill 69 implements most of the tax measures in the province's 2017 budget, as well as new measures that were not announced in the budget. The provisions in Bill 69 are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) as of April 13, 2017 (as Saskatchewan has a majority government).

Corporate tax measures announced in the 2017 budget
Bill 69 includes all of the remaining corporate tax measures announced in Saskatchewan's 2017 budget. In particular, Bill 69:

  • Reduces the general provincial corporate income tax rate by 0.5% effective July 1, 2017, and reduces it by another 0.5% effective July 1, 2019
  • Introduces a new refundable provincial 10% Research and Development Tax Credit, available to Canadian-controlled private corporations, effective April 1, 2017
  • Introduces a new patent box regime (Saskatchewan Commercial Innovation Incentive), which reduces the provincial corporate income tax rate to 6% on taxable income earned from the commercialization of qualifying intellectual property in the province, effective January 1, 2017
  • Increases the rate of the M&P Investment Tax Credit to 6% (from 5%) for eligible capital acquisitions made on or after March 23, 2017
  • Phases out the special corporate tax reduction for credit unions over four years beginning in 2017.

As previously reported, the provincial budget's increase to the corporation capital tax rate on large financial institutions was enacted by Saskatchewan Bill 58, which received Royal Assent on April 13, 2017.

As a result of these changes, Saskatchewan's corporate income tax rates are as follows for 2017:

 

Corporate tax measures not announced in the 2017 budget
Bill 69 includes several corporate tax measures that were not announced in the 2017 budget, such as:

  • Modifications to the rental housing rebate rate to equal the difference between the general tax rate and the small business tax rate as a result of the general corporate tax rate reductions, effective July 1, 2017 
  • Expansion to the determination of full-time employees for purposes of the M&P exporter hiring incentive and M&P exporter head office incentive, effective January 1, 2015 
  • A clarification that corporations may claim either the primary steel production rebate or the Saskatchewan Commercial Innovation Incentive rebate but not both, effective January 1, 2017.

Personal tax measures
Among other changes, Bill 69:

  • Reduces each of the province's personal income tax rates by 0.5% effective July 1, 2017, and another 0.5% effective July 1, 2019
  • Makes changes consequential to the reduced personal tax rates (e.g., adjustments to the provincial income tax rates for trusts)
  • Reduces the dividend tax credit rate for eligible dividends in 0.25% increments for each of the 2017 through 2020 taxation years
  • Suspends the annual indexation of the personal income tax system starting with the 2018 taxation year
  • Eliminates the education and tuition tax credits, effective July 1, 2017

As a result of these changes, Saskatchewan's personal combined federal and provincial top marginal rates for income, capital gains and dividends are as follows for the 2017 taxation year:
 

For more information, contact your KPMG adviser.

Information is current to April 25, 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
 

© 2017 KPMG LLP, a Canada limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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