CHAPTER 08 Tax Considerations
Clean Technology Manufacturing Tax Credit. This is reduction in taxable income or a refund equal to 30% of the capital cost of investments in machinery and equipment used to manufacture or process qualifying clean technology property or used to extract, process or recycle critical minerals such as lithium, cobalt, nickel, graphite and copper. The tax credit would apply to property acquired and becoming available for use as of January 1, 2024, and gradually phase out starting in 2032. Clean Electricity Investment Tax Credit. Both taxable and tax-exempt entities could generally reduce their taxable income or receive a refund of 15% of their eligible investments in, among other things, clean electricity generation systems, stationary electricity storage systems that do not use fossil fuels, and equipment for the interprovincial transmission of electricity. Both new projects and the refurbishment of existing ones would be eligible. The tax credit would be available as of the 2024 budget date for projects that did not begin construction before March 28, 2023, until 2034. Its availability would require compliance with several conditions, including labour requirements. Clean Hydrogen Investment Tax Credit. A taxpayer engaged in qualifying projects that produce hydrogen could reduce its taxable income or obtain a refund equal to part of the cost incurred to purchase and install eligible equipment. The applicable rate would vary between 15% and 40%, depending on the carbon intensity of the hydrogen produced. The credit would apply to property acquired and becoming available for use as of March 28, 2023, and would phase out beginning in 2034. Its availability would require compliance with several conditions, including labour requirements.
Film Tax Credits The federal government and many provincial
governments, including Ontario and Québec, offer an array of incentives for film and video production in Canada. Incentives may also be available for films and videos produced outside Canada where the production corporation incurs eligible labour expenditures in Canada or the relevant province.
Sales and Other Taxes
GOODS AND SERVICES TAX
General Rules Canada imposes a 5% goods and services tax (GST) on the consumption or use in Canada of most tangible or intangible property and the supply of services. A parallel system of input tax credits (ITCs) is designed to ensure that intermediate users of goods and services receive a credit for the GST they pay, so that only the final consumer or end-user in the chain of supply effectively bears the GST. GST is imposed under Part IX of the Excise Tax Act (ETA) and is administered by the CRA (except in Québec).
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