corporate

January 2, 2017

Published by Michael Blank at January 2, 2017

Big Tax Changes for Small Business (Part 2 of 4)

Canada’s Bill C-29 has been passed. There will be big effects for those who use the Small Business Deduction. In my last blog, the Small Business Deduction was defined: basically 17% lower tax rate for the first $500,000 of active business income. In this blog I will discuss what companies can use the Small Business Deduction. In future blogs I will discuss the changes Bill C-29 will make and the outcome for Small Businesses. The main users of the Small Business Deduction are Canadian-Controlled Private Corporations (CCPCs). Obviously, the name implies the corporations must be ‘controlled’ by Canadians. Majority […]

October 15, 2013

Published by Michael Blank at October 15, 2013

Two Corporate Tax Brackets

In Canada, there are two tax brackets for incorporated business income. The lower one, Small Business Deduction (SBD) rate is about 15%. The SBD is on the first $500,000 of income (up until a few years ago it was $400,000). Above $500,000 of income, the second ‘tax bracket’, the corporate rate is 26.5%. To illustrate: between $400K and $500K of income, $15,000 is tax payable. Between $500K and $600K of income, $26,500 is tax payable. This is a huge jump of 76.67%! However, due to the system of integration, the taxation activity flows down to the individual level when cash […]