Taxes

"Sales taxes, business taxes, capital taxes and personal income taxes are now much more competitive with Alberta, and Saskatchewan now sits within the top three or four provinces in the country in terms of favourable tax environments. Even the Fraser Institute recently ranked Saskatchewan third in the country in creating and maintaining a positive investment climate."

"And compared to Alberta, the cost of living in Saskatchewan is far lower."

Canada West Foundation; Op-ed; February 2007

Saskatchewan ’s Competitive Tax Ranking

The province of Saskatchewan has made some major reductions in tax levels in recent years. Most business tax rates have been lowered and the provincial sales tax has been reduced.

While the province of Alberta still leads the country with the lowest overall taxes, Saskatchewan’s tax levels are now much more competitive.

The overall rating of tax regimes in Canada is measured by the Marginal Effective Tax Rates (METRs). Saskatchewan now has the second lowest business tax rating west of Quebec.

Prior to the tax changes Saskatchewan had the highest METR rating.

The following chart shows the impact of the recent tax reductions on the METR tax levels. Saskatchewan has gone from a 38.9% METR tax level to 30.0%.

Source: Finance Canada

Elimination of the Corporate Capital Tax.

One significant change in Saskatchewan taxes was the elimination of the Corporate Capital Tax.

Oil and gas industry associations had indicated to the province that this tax alone accounted for many lost major investments in oil and gas developments. They also indicated that removal of that tax would result in noted increases in development.

Income Tax - Corporate

The following chart compares the Saskatchewan Corporate Income Tax rates with other provinces west of Quebec.

Combined Federal/Provincial Corporate Income Tax Rates

The reduction in the corporate income tax rate results in a 2% differential compared to Alberta. This is a vast improvement from the 5.5% higher rate previously paid in Saskatchewan.

Small Business Income Tax Threshold

The threshold for small business tax rates was recently increased to $500k from $300k. The following table compares provinces after these changes:

Tax Rates and Thresholds on Small Business Income

Tax Information Sources

The following links provide the most common sources of tax information required by the industry.

The Department of Finance http://www.gov.sk.ca/finance/ can also answer specific tax inquiries.

Income Tax Rates :

Corporate Income Tax - http://www.gov.sk.ca/finance/taxation/corpincometax.htm

Personal Income Tax - http://www.gov.sk.ca/finance/taxation/2007taxstructure.htm

Provincial Sales Tax :

Provincial Sales Tax (PST) General - http://www.gov.sk.ca/finance/revenue/pst/pst.htm

PST bulletin for Oil and Gas:

Contractors - http://www.gov.sk.ca/finance/revenue/pst/bulletins/pst13.pdf

Producers - http://www.gov.sk.ca/finance/revenue/pst/bulletins/pst14.pdf

Prorate Taxes (Truckers) - http://www.gov.sk.ca/finance/revenue/prorate/default.htm