The Federal Government’s 2018 budget was released yesterday and based on the coverage by Canada’s largest media companies, it is largely a non-event. In the run-up to the budget, small business, and specifically Canadian Controlled Private Corporations (CCPCs) were being unfairly targeted to by the government through planned tax reforms.
APCC was one of many organizations who had opposed the proposed tax changes. Based on our collective concerns, the Government has removed some of the worst impacts of the planned tax reforms but they have made changes so that only a smaller number of CCPCs will be affected. Here are a couple changes that may affect how you operate as a CCPC and how you save for retirement.
Companies earning more than $50,000 a year in passive income will see less of their business income eligible for the small-business tax rate, which will be 9 percent as of next year. The straight-line reduction of the small-business deduction limit will be $5 for every $1 of investment income above $50,000.
Draft legislation introduced in December as adapted in this budget. This change will limit the ability of private corporations to income sprinkle as a means to utilize the lower marginal tax brackets available to a lower-income spouse or an adult child attending postsecondary education.
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To find out more about how the APCC engages the Government on a number of critical issues facing the independent contracting community, click here.