Yukon Business Tax Breaks & Incentives: Complete Guide & Directory
Discover all major business tax credits, grants, and incentives available to Yukon businesses. This guide covers eligibility, application steps, calculation examples, documentation requirements, federal stacking tips, and audit risks to help your organization maximize support and minimize errors.
Introduction: Yukon’s Business Incentive Landscape
The Yukon is home to a dynamic and growing business community, with opportunities spanning natural resources, film and media, tourism, technology, and Indigenous enterprises. To foster economic growth and innovation, the Yukon government and federal partners offer a variety of tax credits, grants, and incentives. These programs help reduce the cost of doing business, support job creation, and encourage investment in key sectors.
This directory provides a detailed overview of the most important Yukon business tax incentives, practical tips for maximizing your claim, and guidance on combining Yukon and federal supports. Whether you run a small business, a start-up, or are investing in mining, research, or creative industries, this guide is designed to help you get the most out of Yukon’s business-friendly programs.
Yukon Small Business Investment Tax Credit
What is it? The Yukon Small Business Investment Tax Credit (SBITC) encourages Yukoners to invest in eligible Yukon businesses by offering a non-refundable tax credit on investments.
- Credit Amount: 25% tax credit on eligible investments, up to $25,000 per investor per year (maximum $1 million per business).
- Who Can Claim: Yukon and Canadian residents investing in eligible Yukon businesses.
- Eligible Businesses: Most active Yukon-registered businesses, including corporations, partnerships, and co-operatives (excludes passive investments such as rental-only companies).
Eligibility
- Investments must be new shares or debt issued by eligible Yukon businesses for business purposes (not for real estate holding companies).
- Business must have a permanent establishment in Yukon.
- Investor must not be related to a majority shareholder/principal.
How to Claim
- Business applies for eligibility certificate from Yukon government before issuing shares/debt.
- Investor provides funds and receives eligible security.
- After investment, business submits claim forms to Yukon government for tax credit certificates.
- Investor attaches certificate to their Yukon (and federal) tax return (T1221 form) for the year of investment.
Example Calculation
If you invest $10,000 in a qualified Yukon company, you can claim a $2,500 Yukon tax credit on your tax return. (25% x $10,000 = $2,500)
Documentation Required
- Investment certificates issued by Yukon government
- Purchase agreements for securities
- T1221 form for tax filing
Yukon Film and Media Production Incentives
Yukon’s Film Production Incentive Program provides cash rebates to eligible film, TV, and digital media productions in Yukon.
- Labour Rebate: Up to 25% rebate on Yukon labour costs.
- Training Rebate: Up to 30% for hiring and training Yukon residents.
- Spend Rebate: Up to 25% of Yukon spending on goods/services.
Eligibility
- Production company must have a Yukon business license.
- Project must be shot primarily in Yukon.
- Minimum Yukon spend applies.
How to Claim
- Register business and apply before principal photography.
- Track Yukon expenditures and labour throughout production.
- Submit detailed claim package after completion, including invoices, payroll records, and proof of Yukon residency.
- Government review and payment of rebates.
Example Calculation
A Yukon-based production spends $100,000 on local crew and $80,000 on Yukon goods/services. The company can claim up to $25,000 (25% x $100,000) in labour rebate and up to $20,000 (25% x $80,000) in spend rebate.
Documentation Required
- Yukon payroll records, T4s, contracts
- Invoices for goods/services
- Proof of Yukon residency for staff
- Detailed claim forms from Yukon government
Yukon Mining Exploration Tax Credit (YMETC)
What is it? The YMETC offers a refundable tax credit for eligible mineral exploration conducted in Yukon.
- Credit Amount: 25% of eligible exploration expenses (including geoscientific work, drilling, environmental baseline, etc.).
- Who Can Claim: Yukon corporations, partnerships, and individuals with qualifying exploration expenditures.
Eligibility
- Work must be on a Yukon mineral property, not production or processing.
- Eligible expenses must be incurred during the tax year.
How to Claim
- Track all exploration expenses with detailed records (receipts, contracts, payroll).
- Complete YMETC claim forms and submit with Yukon tax return.
- Attach proof of expenses and summary of exploration work.
Example Calculation
If your company incurs $200,000 in eligible exploration expenses, you may receive a $50,000 refundable Yukon tax credit.
Documentation Required
- Invoices, receipts, payroll records
- Project maps and reports
- Summary of eligible work performed
Scientific Research & Experimental Development (SR&ED) in Yukon
Yukon businesses can benefit from the federal SR&ED program for qualified R&D expenditures, with top-ups from Yukon.
- Federal SR&ED: Up to 35% refundable credit for eligible Canadian-controlled private corporations (CCPCs), 15% for others.
- Yukon Top-Up: Additional 15% non-refundable credit on eligible Yukon SR&ED expenditures.
Eligibility
- Applies to experimental development, applied research, basic research, and support work performed in Yukon.
- Must meet Canada Revenue Agency SR&ED definitions and documentation standards.
How to Claim
- Track eligible SR&ED expenses and work in real time (time sheets, technical logs, invoices).
- File CRA SR&ED forms (T661, T2SCH31) and Yukon SR&ED forms with your tax return.
- Maintain full documentation for audit.
Example Calculation
If a CCPC spends $250,000 on eligible R&D in Yukon, it may receive $87,500 federal (35%) and $37,500 Yukon (15%) credits – $125,000 total.
Documentation Required
- Technical project descriptions and supporting documentation
- Detailed expense records
- Time sheets, payroll, contracts
Combining Yukon Credits with Federal Incentives
Most Yukon business credits and incentives are designed to be stacked with federal programs to maximize benefit. For example:
- SR&ED: Claim both federal and Yukon SR&ED credits on the same expenditures.
- Mining Exploration: Combine Yukon Mining Exploration Tax Credit with federal Mineral Exploration Tax Credit (METC).
- Film: Stack Yukon film rebates with the federal Canadian Film or Video Production Tax Credit (CPTC).
- Investment: Investors may be able to claim both the Yukon and federal investment tax credits if eligible.
Best Practices
- Coordinate claim timing to avoid missing deadlines.
- Keep clear records separating Yukon and federal eligible expenses.
- Consult a tax professional if stacking credits or grants.
Practical Scenario
A Yukon tech start-up develops a new environmental monitoring device. It claims the federal SR&ED credit, the Yukon SR&ED top-up, and receives a grant from Yukon Job Grant for staff training. By coordinating claims and documentation, the company maximizes its support while staying compliant.
Audit Risk, Common Errors & Best Practices
Yukon business credits and incentives may be audited by territorial or federal authorities. Common issues include:
- Insufficient supporting documentation for claimed expenses.
- Ineligible activities or expenditures included in claims.
- Missed deadlines for application or filing.
- Improper stacking of incentives (double-dipping).
Best Practices
- Maintain organized, real-time records (receipts, payroll, contracts, technical reports).
- Understand each program’s specific eligibility and documentation rules.
- File applications and claims on time.
- Consult with a tax advisor or government program officer when uncertain.
Documentation Checklist
- Investment/share certificates, purchase agreements
- Detailed invoices and receipts
- Payroll, T4s, time sheets
- Technical/project documentation, maps, reports
- Government eligibility and approval letters
Frequently Asked Questions (Yukon Business Tax Credits)
- Can I combine Yukon and federal business tax credits on the same project?
- Yes, in most cases. For example, SR&ED, mining exploration, and film credits can be stacked, but you must avoid double-claiming the same expense for more than one credit of the same type.
- What if my business is incorporated outside Yukon but operates here?
- You must have a permanent establishment in Yukon and be registered to do business in the territory to qualify for most credits.
- How do I prove Yukon residency for film or labour incentives?
- Collect proof such as Yukon driver’s license, utility bills, or health card for each employee/contractor claimed.
- What are the deadlines for Yukon business tax credit claims?
- Deadlines vary: investment credits and SR&ED must be claimed on your annual tax return, while film incentives require application before and after production. Always check program guidelines.
- What happens if I make an error or am audited?
- If you make a mistake, you may correct your claim or repay overclaimed credits. During an audit, officials will request supporting documentation for all major expenses and project details. Keep records for at least six years.
- Where can I get official guidance or help?
- Visit the Yukon government business portal or Canada Business Taxes, or consult a Yukon-based tax professional.