Business and Economic Development

Tax Credits and Programs: Employee Share Purchase Tax Credit 


The Employee Share Purchase Tax Credit offers employees (including directors and officers of an eligible corporation) the opportunity to buy into and own a portion of a business under an Employee Share Ownership Plan (ESOP). The aim of the program is to support business growth, facilitate succession planning for family businesses and promote employee participation in business success. Those who buy shares from a registered ESOP will qualify for a partially refundable 45 percent tax credit.

 

Type of Assistance

Employees can buy shares from their employer and receive a tax credit if the business:

  • has pre-registered its ESOP,
  • is a Canadian-controlled private corporation with a permanent establishment in Manitoba,
  • has assets being used in an active business,
  • generates revenue from an active business and has net and gross assets of less than $10 million and $25 million respectively,
  • pays at least 25 percent of its remuneration to employees who are Manitoba residents.

Employee investments involving succession planning, business takeovers, or buyouts are eligible for a tax credit of up to $202,500 annually (the equivalent of purchasing $450,000 in shares). The first $27,000 of the tax credit is fully refundable to the employee. The remaining amount of the tax credit can be applied to the employee’s Manitoba personal income tax incurred in the year, in the three years prior to the share purchase year or in the following 10 years, up to a maximum $67,500 annually (less the refundable tax credit).

Investments promoting employee ownership are eligible for a fully refundable tax credit of up to $27,000 annually (the equivalent of purchasing $60,000 in shares). 

 

For more information:

 

Contact

Financial Analysis Branch
1010 - 259 Portage Avenue
Winnipeg, MB R3B 3P4
General email: FABGET@gov.mb.ca
General phone number: 204-945-2770

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