What’s New This Tax Year for Your Business?
As promised last week, here is the latest update for the changes that the new year brings! While most of you may already know, smokers are now prohibited from smoking on restaurant, bar and park premises. Across the nation, Canadians should brace themselves to face new federal and provincial changes that may put money back in their pockets. Check out the list below indicating the various changes that may impact your business:
General corporate tax rate:
The general corporate tax rate of 11.5% is speculated to be frozen till 2017-2018 when the new balanced budget is reached.
Canadian Controlled Private Corporations
The threshold for active business income of $500,000 will be reduced for CCPCs on a straight line basis that had taxable capital employed in Canada in the previous year ranging from $10 million to $15 million. Ontario has applied this ‘clawback’ to small business deductions for all tax years ending after May 1, 2014.
Research and Development
Currently, there is a Scientific Research and Experimental Development tax incentive for businesses which encourages research and development in Canada. There is a provincial level as well as a federal level to this incentive and the provincial government is reviewing its options to restructure such R&D tax support programs. Consideration is being given to incrementally increase tax credits given for R&D as investment in R&D is increased and decrease the incentive when investment is decreased.
New Ontario tax incentives
The government is considering introducing 2 new types of taxes:
The first is a corporate tax that would have the ability to be decreased or eliminated when there is investment in new equipment or when the business incurs specifically defined investment expenses. The second is a payroll tax which the employer has the ability to decrease or eliminate by funding and investing in employee training programs.
We will be sure to keep you posted of changes that will affect your personal taxes next week! We wish you a successful year ahead and as always, this list is not exhaustive. If you have any further questions, please contact your accountant or feel free to contact us. We can be reached at firstname.lastname@example.org or give us a call at 416-495-1098.