Small business tax rate reductions

In it’s promise to support middle class tax payers, Prime Minister Justin Trudeau, Finance Minister Bill Morneau and Small Business and Tourism Minister Bardish Chagger announced October 16, 2017 that the federal component of the corporate small business tax rate will reduce from 10.5% currently to 10% January 1, 2018 and a further reduction down to 9% January 1, 2019.

Ministers Chagger and Morneau also announced the Government’s intention to simplify the proposal to limit the ability of owners of private corporations to lower their personal income taxes by sprinkling their income to family members who do not contribute to the business. The vast majority of private corporations will not be impacted by the proposed income sprinkling measures. Corporations with family members who meaningfully contribute to the business will not be impacted by the proposed measures on income sprinkling. In addition, the Government also announced it will not be moving forward with proposed measures to limit access to the Lifetime Capital Gains Exemption.

See CRA link http://www.fin.gc.ca/n17/17-097-eng.asp

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