The Saskatchewan government introduced legislation yesterday to reduce its Small Business Corporate Tax Rate to 0% effective October 1, 2020. The tax rate will increase to 1% effective July 1, 2022, and then back to 2% effective July 1, 2023. The reduced rate will apply to up to $600,000 of taxable income per year in Saskatchewan, and be pro-rated for taxation years that include periods with different tax rates. This reduction only applies to Saskatchewan provincial tax, the Federal small business tax rate (currently 9% for all periods mentioned above) will still apply to taxable corporate income.
The government estimates an average savings of $6,100 to over 31,000 incorporated Saskatchewan small business corporations, with a maximum savings of $27,000 per corporation. No special applications or elections will be necessary to access the reduced tax rates.
Please contact your Virtus Group advisor if you have any questions.