Recent Strategic Tax Incentives: Personal Tax
- The middle bracket rate is reduced from 14.0% to 13.5% for the 2006 taxation year.
- The basic personal amount tax credit increases by $100 to $7,734 for the 2006 taxation year.
- The Community Enterprise Development Tax Credit encourages Manitobans to invest in their communities and provides community-based enterprises with the means to raise necessary equity capital. The credit is equal to 30% of the eligible investment up to a maximum investment of $30,000. The qualifying period is extended to December 31, 2008.
- The Manitoba Equity Tax Credit assists in the development of capital markets in Manitoba and encourages Manitobans to invest in Manitoba companies. The credit is equal to 15% of the eligible investment and is earned on a pro-rate basis over a three-year period. The maximum credit per year is $1,500. The eligibility period for companies to issue qualifying shares is extended to June 30, 2008.
- For eligible political contributions made in 2005 and subsequent years, an
individual may claim a tax credit equal to 75% of the first $400, double the
previous threshold of $200. Contributions above $400 and up to $750 are eligible for a 50% credit, and contributions above $750 are eligible for a 33.33% credit. The maximum credit an individual can claim increases from $500 to $650. - The Education Support Levy is a province-wide property tax based levy used to support Kindergarten to Senior 4 education. Provincially, the 2005 property tax statement will reflect a reduction in the mill rate for residential property from 4.56 mills to 2.42 mills. The new rate may be slightly different for the City of Winnipeg.
Recent Strategic Tax Incentives: Business Tax
- Effective July 1, 2006 the general corporate rate is reduced from 15.0% to 14.5%.
Effective July 1, 2007 the rate is further reduced to 14.0%. - Effective January 1, 2006 the small business rate is reduced from 5.0% to 4.5%.
Effective January 1, 2007 the rate is further reduced to 4.0%. - The 15% Research and Development Tax Credit supports investment in
innovation. Effective for eligible expenditures made after March 8, 2005, the
credit increases by one-third to 20%. - The 10% Manufacturing Investment Tax Credit supports investment in plant
upgrading and capacity expansion. Effective for eligible expenditures made after March 8, 2005, one-fifth of the earned credit is refundable. The eligibility for the Manufacturing Investment Tax Credit is broadened to include used buildings, machinery and equipment as qualifying property effective after March 8, 2005. - The 10% Co-operative Education Tax Credit encourages employers in Manitoba to provide work placements to co-op students in post-secondary institutions. The eligibility period is extended to December 31, 2008.
- The Film and Video Production Tax Credit encourages companies to produce films and videos in Manitoba. The credit is increased from 35% to 45% effective for productions that commence principal photography after March 8, 2005. The boundary for the 5% rural and northern incentive is reduced from 40 kilometres to 35 kilometres from Winnipeg. The boundary revision applies to productions that commence principal photography after April 19, 2004. The start of the period of eligibility for salaries shifts from the “final script stage” to the “production commencement time”. The expanded period of eligibility applies to a production that commences principal photography after March 8, 2005. If development commenced before March 9, 2005 and eligible salaries were incurred by the company in its taxation year that includes March 9, 2005, the new rule will apply.