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Royal Assent for Manitoba Budget Implementation Bill

Royal Assent for Manitoba Budget Implementation Bill

The province’s small business deduction limit will increase in 2019

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Manitoba's Bill 34 received Royal Assent on November 8, 2018. The bill includes a number of corporate tax changes that were announced in the province's 2018 budget.

Ordinarily, the corporate income tax measures in Bill 34 would be considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on the date the bill received first reading (as Manitoba has a majority government), which was June 25, 2018. However, in this case it may be reasonable to consider that the bill's corporate income tax measures were not substantively enacted until August 15, 2018, since Manitoba did not publically release Bill 34's contents until that date. The corporate income tax measures in Bill 34 are enacted for U.S. GAAP purposes on November 8, 2018, the date the bill received Royal Assent.

Corporate measures
The corporate income tax measures in Bill 34 include an increase to the small business deduction limit to $500,000 (from $450,000), effective January 1, 2019. The bill also includes a number of changes specific to credit unions. Among other things, this bill:

  • Introduces a five-year phase-out of the special tax deduction for credit unions and caisses populaires, beginning on January 1, 2019
  • Eliminates the 1% profits tax on credit unions and caisses populaires in Manitoba with taxable income over $400,000, effective January 1, 2019
  • Makes certain retroactive amendments to the small business deduction for credit union provisions.

The bill also includes a number of changes affecting corporate income tax credits, including updates to the Research and Development Tax credit to ensure they appropriately reflect earlier federal changes.

For more information, contact your KPMG adviser.

Information is current to November 13, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
 

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