Tax Changes for Private Corporations

by in Canadian Government News and Updates
Tax Changes for Private Corporations
A Notice of Ways and Means Motion was published last October 24, 2017. Here are the highlights with regards to the tax changes for private corporations:
  1. Revision of Gross Up rate for non-eligible dividends: from 17% for 2017 to 16% for 2018 and 15% for 2019 and later years;
  2. Revision of the tax credit for non-eligible dividends: from 21-29ths of the gross-up in 2018 to 8/11ths in 2018 and 9-13ths in 2019 and later years;
  3. Increase the small business deduction: from 17.5% in 2017 to 18% for 2018 and to 19% for the 2019 and subsequent taxation years;
  4. Move forward on restricting income sprinkling effective 2018 and subsequent years. A revised draft legislation will be released soon;
  5. Limit the benefit of investing passively in private corporations including an annual threshold of $50,000 of passive income;
  6. Not move forward with the proposed measures to limit access to the Lifetime Capital Gains Exemption and the proposed measures relating to the conversion of income into capital gains;
  7. Ensure that farmers and fishers are not inappropriately denied the small business deduction on income from sales to a cooperative.
Source: http://www.taxtips.ca/federalbudget/2017-fall-economic-statement.htm, http://www.fin.gc.ca/drleg-apl/2017/nwmm-amvm-1017-eng.asp
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