Corporations Capital Tax

Corporations Capital Tax is a tax on the annual paid up capital of corporations that have a permanent establishment in Manitoba and taxable paid up capital of $10 million or more.

Associated corporations are required to share one $10 million deduction among their group, based on the combined taxable paid up capital of the group. Special rules/tax rates apply in computing the taxable paid up capital and tax payable for banks and trust and loan corporations.

The rules for allocating the capital tax payable in Manitoba are generally similar to the allocation rules under the Income Tax Act (Canada). Please contact Manitoba Finance Taxation Division for additional details on the general allocation rules and the special allocation rules for certain corporations.

Certain corporations are exempt, including credit unions, co-operative corporations, and family farm corporations.

Tax Rates:

For fiscal years commencing after January 1, 2007:

• 0.3% for corporations with taxable paid-up capital between $10 million and $20 million
• 0.5% for corporations with taxable paid-up capital over $21 million
• a notch provision applies for total paid-up capital between $20 million and $21 million.
• 3.0% for banks, trust and loan corporations.

For fiscal years commencing after January 1, 2008:

• 0.2% for corporations with taxable paid-up capital between $10 million and $20 million
• 0.4% for corporations with taxable paid-up capital over $21 million
• a notch provision applies for total paid-up capital between $20 million and $21 million.
• 3.0% for banks, trust and loan corporations.

Budget 2007 commits Manitoba to eliminating the general capital tax, except for Crown corporations, as of December 31, 2010, subject to balanced budget requirements.

For detailed information, please contact:

Manitoba Finance, Taxation Division
Tel: (204) 945-5603 or 1-800-782-0318 (Winnipeg)
(204) 726-6153 or 1-800-275-9290 (Brandon)
Web: www.gov.mb.ca/financ e/taxation

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