What are the tax requirements for corporations operating in Manitoba?
The taxable income of corporations operating in Manitoba is subject to federal and provincial corporate tax with special taxation for corporations operating in the mining and insurance industries. Tax credits are available for employers of specified workers and those investing in green energy equipment. GST registration is required unless the corporation is a small supplier. RST must also be collected on sales of most retail goods and some services. In addition, WCB registration and premiums must be completed by employers in non-exempt industries and Health and Post-Secondary Tax Levy must be paid on total remuneration paid to employees above a certain threshold.
Corporations operating a fixed place of business in Manitoba must pay federal and provincial tax at the following rates:
- Income of a Canadian Controlled Private Corporation (CCPC) below $500,000 – 9.0%.
- Income of a CCPC above the small business limit – 27.0%.
- Income of non-CCPCs – 27.0%.
- Investment income – 50.7%.
Monthly or quarterly corporate tax installments are required when tax payable exceeds $3,000 in the prior year. Taxes that remain outstanding three months after year-end are subject to interest.
Corporations operating in the mining or mineral processing industry in Manitoba pay tax on mining profit. This does not apply to oil and gas, rock, gravel, peat, clay and gypsum mining and processing.
Insurance Corporations Tax
Corporations providing insurance under a contract of insurance are subject to a tax of 2.00 – 4.25% on the premiums of the contract. An additional amount of 1.25% on property insurance premiums is required.
Paid Work Experience Tax Credits
A tax credit is available to qualified employers for wages paid to certain types of employees and recent graduates in Manitoba. This credit is between 15-25% of the wages paid with a per year or lifetime cap per individual, depending on the incentive.
Green Energy Equipment Tax Credit
Corporations investing in green energy equipment such as geothermal heat pump systems, solar thermal energy systems and biomass energy equipment can claim a refundable tax credit of 10-15% of the cost of the equipment.
Corporations with worldwide taxable income in excess of $30,000 must register and charge GST on all non-exempt items.
GST is charged to customers on taxable supplies at a rate of 5%.
For expenses related to a business’s commercial activities, an input tax credit (ITC) can be claimed for GST paid. Corporations with taxable income less than $30,000, are not required to register for GST, however, where such a small supplier has voluntarily registered, ITCs may be claimed on business expenses.
The filing dates for GST returns are determined by the business’s annual taxable income and can be annually, quarterly or monthly.
Corporations with annual taxable sales of more than $10,000 must charge 7% on retail sales and rentals of most goods and some services. This tax must be filed and paid to the Province of Manitoba by the 20th of the month on which the taxes are due.
Businesses with employees must generally register with, and pay premiums to, the Workers Compensation Board of Manitoba. Premiums are based on the level of risk involved in the industry and the business’s size and prior claims history.
Health and Post Secondary Tax Levy
Employers with a permanent establishment in Manitoba with remuneration above $1.5 million must pay a tax levy of 2.15-4.3% on remuneration above the $1.5 million threshold.
If you would like to discuss your corporate tax requirements as a business operating in Manitoba, please contact a member of the EPR tax team by completing the contact form below. Our tax experts can advise on the best structure to reduce or minimize the impact of the taxes.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. EPR Maple Ridge Langley, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.