Saskatchewan Budget Announcement - 2018 SASKATCHEWAN BUDGET ANNOUNCEMENT - 2018 SASKATCHEWAN BUDGET HIGHLIGHTS On Tuesday, April 10, 2018, the Saskatchewan Minister of Finance, the Honourable Donna Harpauer, presented the province’s 2018 Budget. As part of its “On Track” theme, a budgeted deficit of $365 million was announced for 2018-2019 but with a return to balance and a modest surplus for 2019-2020. Below are highlights from Budget 2018: A. Corporate Tax Measures CORPORATE TAX RATES No new corporate income tax rate changes have been announced in this year’s Budget. As previously announced, the general corporate income tax rate and the M&P income tax rate increased to 12 percent and 10 percent respectively and the small business limit threshold increased to $600,000. These measures took effect on January 1, 2018. The current corporate income tax rates for 2018 are outlined below: Small Business Rate General Rate Threshold Non M&P M&P Federal 10.0% $500,000 15.0% 15.0% Saskatchewan 2.0% $600,000 12.0% 10.0% B. Personal Tax Measures PERSONAL TAX RATES Income Tax Brackets In last year’s Budget, Saskatchewan announced it would be reducing each of its three income tax brackets by 0.5 percent effective July 1, 2017 and a further 0.5 percent effective July 1, 2019. This year’s Budget announced that it would temporarily freeze the planned July 1, 2019 reduction to a later time. The full impact of last year’s mid-year rate reduction will be realized in 2018. The Saskatchewan personal income tax rates are as follows: 2018 Rates 2017 Rates First Bracket 10.5% 10.75% Second Bracket 12.5% 12.75% Third Bracket 14.5% 14.75% SASKATCHEWAN BUDGET ANNOUNCEMENT - 2018 Dividend Tax Credit The Budget announced that for the 2018 taxation year, the effective Saskatchewan dividend tax credit rate will be 3.333 percent of taxable non-eligible dividend income, and for 2019 and subsequent taxation years, the rate will be 3.362 percent. Top Combined Marginal Rates for 2018 The top marginal personal income tax rate for Saskatchewan is 14.50 percent for 2018. The current top combined federal and Saskatchewan marginal rates for 2018 are outlined below: Salary, business income, interest 47.50% Capital gains 23.75% Eligible dividends 29.64% Non-eligible dividends 39.59% CAREGIVER TAX CREDITS In its 2017-2018 Budget, the federal government announced the consolidation of federal caregiver-related income tax credits into a single Canada Caregiver Credit. Saskatchewan will not mirror the federal change and will instead maintain the existing provincial Infirm Dependant Tax Credit and Caregiver Tax Credit. Dependants who are currently eligible to be claimed under these tax credits will remain eligible. Saskatchewan’s $9,464 tax credit amounts also remain higher than the $6,883 federal amount. C. Indirect Tax Measures TAXATION OF VEHICLES Budget 2018 announces the elimination of the PST exemption for used light vehicles, effective April 11, 2018. This measure removes the difference in the tax treatment between used light vehicles and all other types of used vehicles, for which PST has always applied. Purchasers of used vehicles will now face the same tax rules, regardless of the type of vehicle they are purchasing. The Budget also announces the restoration of the trade-in allowance when determining the PST, also effective April 11, 2018. In other words, when trading in a vehicle, PST is paid only on the difference in price between the value of the trade-in and the total selling price of the vehicle being purchased. For purchases of used vehicles through private sale for personal or farm use, there had previously been a $3,000 deduction from purchase price when calculating PST. Budget 2018 converts this deduction into a $5,000 exemption, in that a purchase price of $5,000 or less will result in no PST. A purchase price in excess of $5,000 will have the entire amount subject to PST. SASKATCHEWAN BUDGET ANNOUNCEMENT - 2018 ENERGY STAR® APPLIANCES Since 2003, an exemption from the PST has existed for ENERGY STAR® certified appliances to encourage consumers to make energy-efficient household purchases. The PST exemption is no longer needed to encourage this consumer behaviour and the Budget therefore eliminates the PST exemption for these appliances, effective April 11, 2018. D. Other Tax Measures CANNABIS TAXATION In December 2017, Canadian finance ministers agreed in principle to a cannabis taxation approach. Saskatchewan will be entering into an initial two-year agreement under which the province will receive 75 percent of the federal cannabis excise duty revenue generated in the province. Saskatchewan will also receive a proportionate share of any revenue generated in Canada above the $100 million cap on federal revenues from the federal cannabis excise duty. The PST will also apply to all retail sales of cannabis products in Saskatchewan. In addition, for sales in the province, the federal cannabis excise duty rate will be increased to account for interprovincial sales tax rate differentials, and Saskatchewan will receive this revenue from the federal government. SASKATCHEWAN BUDGET ANNOUNCEMENT - 2018 ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world. Saskatchewan Region Contacts SASKATOON Jeff Henkelman 306.664.8361 Dave Boyko 306.664.8301 Ron Friesen 306.664.8324 Jaymon Hill 306.664.8371 Rashelle Dolan 306.664.8300 REGINA Carol Hanney 306.790.7930 Regan Exner 306.790.7907 Wayne Paproski 306.790.7941 Josh Shankowsky 306.790.7931 Jeff Harrison (Indirect Tax) 306.751.7998 SWIFT CURRENT Cindy Heinrichs 306.770.3627 Tracy O’Donnell 306.770.3645 Visit us at MNP.ca Praxity AISBL is a global alliance of independent firms. Organised as an international not-for-profit entity under Belgium law, Praxity has its executive office in Epsom. Praxity – Global Alliance Limited is a not-for-profit company registered in England and Wales, limited by guarantee, and has its registered office in England. As an Alliance, Praxity does not practice the profession of public accountancy or provide audit, tax, consulting or other professional services of any type to third parties. The Alliance does not constitute a joint venture, partnership or network between participating firms. Because the Alliance firms are independent, Praxity does not guarantee the services or the quality of services provided by participating firms. Next >