Taxation Changes - 2018 Budget.pdf

The small business income limit eligible for the small business deduction is increased from $450,000 to $500,000 on January 1, 2019. Canadian-controlled private corporations that qualify for the small business deduction pay a 0% rate of Manitoba corporation income tax. A new refundable corporation income tax credit is introduced to stimulate the creation of licensed child care centre spaces in workplaces. A tax credit will be available for private corporations that create new infant and preschool child care spaces as part of a centre for a total benefit of $10,000 per new space created, claimable over five years. The credit would be available for licensed spaces created by a taxable corporation that is not primarily engaged in child care services, effective after Budget day and before 2021. The total number of spaces will initially be limited under this program to 200 but may be increased over time. Effective March 12, 2018, the $15 million revenue cap on the size of eligible issuer corporation is eliminated and the investment minimum for an investor is lowered from $20,000 to $10,000. The special tax deduction which currently allows credit unions and caisses populaires to pay a lower rate of tax on a portion of their income is being phased out over five years beginning on January 1, 2019. As an offsetting measure, the credit unions profit tax is eliminated, as announced below. Credit unions and caisses populaires will continue to have access to the small business deduction as do Canadian-controlled private corporations. Effective for January 1, 2019, the Rental Housing Construction Tax Credit is eliminated. Projects currently under provincial review or with approvals are not affected. No new project applications will be processed by Manitoba Housing after 2018 and projects must be available for use before 2021. The Manitoba Book Publishing Tax Credit, scheduled to expire on December 31, 2018, is extended to December 31, 2019. The Cultural Industries Printing Tax Credit, scheduled to expire on December 31, 2018, is extended to December 31, 2019. Effective May 1, 2018, fertilizer bins used in a farming operation will be exempt from retail sales tax. Effective May 1, 2018, drill bits designed specifically for oil or gas exploration or development will be exempt from retail sales tax. Effective midnight, March 12, 2018, the tobacco tax rate on fine cut tobacco changes from 28.5¢/gram to 45¢/gram. The tobacco tax rate on cigarettes, cigars, raw leaf and other tobacco products remains unchanged. Effective January 1, 2019, the Credit Unions and Caisses Populaires Profits Tax is eliminated. Electronic filing of insurance corporations tax will be required using Manitoba's online tax system, TAXcess. Businesses must be registered for the insurance corporation tax using TAXcess prior to filing and paying the tax. The 2018 return required to be filed and paid electronically is due on March 20, 2019.