Manitoba odour-control tax credit

Important notice
Changes have been announced to Manitoba odour-control tax credit. See What's new for corporations.

You can earn this credit on eligible expenditures made before January 1, 2012, to reduce Manitoba income tax payable.

Eligible expenditures consist of the capital costs of depreciable capital properties that become available for use in the year and were acquired for preventing, reducing, or eliminating nuisance odours that arise or may arise from the use or production of organic waste.

You can earn this credit if odour control is a significant, but not necessarily your primary, purpose for acquiring the eligible capital property. The properties must be unused and must not have been acquired for any use by anyone before. Eligible expenditures are either prescribed by regulation or approved by the Minister.

The credit is equal to 10% of the eligible expenditures and is non-refundable. However, for eligible expenditures made by an agricultural corporation, part of the credit is refundable (see below).

You can carry back an unused credit to the 3 previous tax years from the tax year in which you earned the credit. You can also carry forward the unclaimed credit to the 10 tax years that follow the tax year in which you earned the credit. Unused credits may be carried forward on amalgamation or wind-up.

The corporation may be the beneficiary of a trust or a member of a partnership at the end of the trust's or partnership's tax year. If so, it may include its proportionate allocation or share of the trust/partnership's eligible expenditures in computing its odour-control tax credit.

You cannot claim this credit on eligible expenditures used in calculating any other credit.

Agricultural corporations

Effective March 7, 2006, agricultural corporations are eligible for a refundable part of this credit. The maximum refund that they can claim is the lesser of:

• the tax credit that is more than the non-refundable tax credit claimed in the current year; and
• the property tax paid net of government assistance received or receivable on Manitoba farmland used by the corporation in the business of farming, for the calendar year ending in a tax year after March 6, 2006.

This portion of the credit is referred to as "Manitoba refundable odour-control tax credit for agricultural corporations" in schedules 5 and 385.

Claiming the credit

File a completed Schedule 385, Manitoba Odour-Control Tax Credit, with the return no later than 12 months after your income tax return is due for the tax year in which the expenditures were incurred. See the schedule for more details.

Enter the amount of the credit you are claiming on line 607 of Schedule 5, Tax Calculation Supplementary - Corporations.

If you are an agricultural corporation, enter the refundable credit you are claiming on line 623 of Schedule 5.

Forms and publications

• Schedule 385, Manitoba Odour-Control Tax Credit
• Schedule 5, Tax Calculation Supplementary - Corporations

Government partners

• Manitoba (provincial site)