Corporate Income Tax
Saskatchewan levies provincial corporate income tax under the terms of a tax collection agreement with the federal government (as do other provinces and territories with the exception of Quebec and Alberta). Under the tax collection agreement, the federal government administers the provincial income tax system using the same determination of a corporation's taxable income for both federal and provincial tax purposes.
Saskatchewan's corporate income tax is levied as a percentage of the share of a corporation's taxable income that is allocated to the Province. Saskatchewan's general tax rate on corporate taxable income was reduced to 12 per cent effective July 1, 2008.
Saskatchewan small businesses, defined as Canadian-controlled private corporations, pay a reduced rate (commonly known as the small business rate) on eligible business income. This rate will decline from 4.5 per cent to 2.0 per cent as of July 1, 2011. The eligible income threshold for the small business tax rate was increased to $500,000 effective July 1, 2008.
In addition to the tax reduction for small businesses, Saskatchewan provides corporations involved in manufacturing and processing a reduction in the general tax rate to as low as 10 per cent on M&P profits, depending on the extent of the company's presence in the province.
Saskatchewan also provides resource companies with compensation in lieu of full deductibility of provincial royalties and similar taxes for the purposes of provincial income taxation, under the Saskatchewan Royalty Tax Rebate Program. However, as a consequence of the federal government's initiative to re-introduce full deductibility of provincial resource royalties for federal and provincial income taxation, the Saskatchewan Royalty Tax Rebate is no longer necessary and will be allowed to wind down. Commencing January 1, 2007, the carry forward period for any outstanding Royalty Tax Rebate balances will be limited to seven years.
In addition to these tax reduction measures, Saskatchewan also offers tax credits to encourage corporations to make investments in M&P capital assets and research and development activities.
The Saskatchewan corporate income tax system is administered on the Province’s behalf by the Canada Revenue Agency in conjunction with the administration of the federal income tax system. Provincial corporate income tax forms are produced and distributed by the Agency.
For further information about Saskatchewan corporate income tax, please contact:
Canada Revenue Agency
Saskatchewan's Corporate Income Tax Rates
Note: The reduction to the small business tax rate from 4.5% to 2.0% is effective July 1,2011. The rate changes are applied on a prorated basis for taxation years that straddle their effective dates.
*The M&P profits reduction is calculated by applying the qualifying reduction rate against eligible M&P income. The qualifying reduction rate is determined by multiplying a corporation's Saskatchewan allocation percentage by the maximum reduction allowance. Eligible Saskatchewan M&P income is determined as the Saskatchewan share of a corporation's national M&P income.
Saskatchewan-based manufacturing and processing firms are eligible for a reduced corporate income tax rate.
Information on the refundable income tax credit designed to encourage plant and equipment investment in Saskatchewan.
The Research and Development (R&D) Credit encourages R&D activity in Saskatchewan.
Rental Housing Rebate or Corporate Income Tax Rebate on New Rental Housing (CITR program) is designed to encourage investment in new rental housing units.
The Royalty Tax Rebate (RTR) helps to offset the provincial portion of income taxes that are payable as a result of the federal government's decision to disallow provincial royalties and similar taxes as deductions in determining taxable income.
Copies of the Income Tax Act, The Income Tax Act, 2000 and associated provincial regulations are available through the Queen's Printer of Saskatchewan.
Copies of the federal Income Tax Act and associated federal regulations are available through the Government of Canada, Ministry of Justice.