Saskatchewan Manufacturing and Processing Investment Tax Incentives on New and Used Equipment

Overview of the Saskatchewan Manufacturing and Processing Investment Tax Incentives on New and Used Equipment program:

New Equipment: The Saskatchewan Manufacturing and Processing (M&P) Investment Tax Credit (ITC) for qualifying new equipment is administered by the Canada Revenue Agency on behalf of Saskatchewan. It may be claimed by including a completed Schedule 402 with the annual T2 Corporate Income Tax Return.

Eligibility criteria of the Saskatchewan Manufacturing and Processing Investment Tax Incentives on New and Used Equipment program:

• The ITC can be earned by M&P corporations through the purchase of qualifying assets to be used in a manufacturing and processing activity. The ITC uses the federal definition of manufacturing and processing. According to federal Income Tax Folio S4-F15-C1, "manufacturing" normally involves the creation of something or the shaping, stamping, or forming of an object out of something, while "processing" usually refers to a technique of preparation, handling, or other activity designed to effect a physical or chemical change in an article or substance, other than by natural growth.
• A number of activities are excluded from the definition of "manufacturing and processing" under subsection 125.1(3) of the federal Act. These excluded activities are farming, fishing, logging, construction, oil and gas extraction and processing, mineral extraction and processing, and activities of corporations whose primary activity is not manufacturing and processing.
• A corporation must obtain greater than 10% of its gross revenues from manufacturing and processing activities in order to qualify as an M&P corporation.