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Proposed Income Tax for Business

The Federal Government released a document Consultations on Tax Planning Using Private Corporations. This midsummer proposal to implement some of the most significant corporate tax changes in 50 years has drawn the ire of Chambers of Commerce across Canada. 

If your business is incorporated, then you could be facing a larger tax bill and big compliance costs from the government’s new proposals to change the way corporations are taxed.

Here are three things you need to know about the tax changes proposed by the federal government:

 

Do you employ family members? The government wants to scrutinize their compensation to apply a much higher tax rate on income they consider “unreasonable”.

 

Do you invest the profits from your business? The federal government is proposing to tax that income at an effective rate of 70%.

 

Do you want to pass your business on to your children? Tough new rules make it difficult for younger kids to get the capital gains exemption. They could be double-taxed.

 

Finance Canada has launched a consultation even though it is clearly determined to move forward – the legislation is already drafted. The consultation is open to October 2nd, but let’s be honest, notwithstanding a successful coordinated uprising by the business community leading to change, this proposal will become legislation.

 

In hopes to slam the breaks on Finance Canada’s runway train the chamber network across Canada is using its collective voice on this issue; your voice as a business person needs to be heard as part of this initiative.

 

If you are concerned about these changes, visit The Greater Vancouver Board of Trade website and complete the Letter on proposals from a concerned B.C business form and tell all MPs in British Columbia to “hit the pause button” on business tax changes!

 

More information on the MAJOR INCOME TAX CHANGES can be found here:

 

http://www.chamber.ca/media/news-releases/170831-business-groups-unite-call-on-ottawa-to-drop-federal-tax-changes/

 

http://www.huffingtonpost.ca/tim-paziuk/look-at-the-numbers-theres-no-justifying-a-tax-hike-on-employers_a_23152129/?utm_hp_ref=ca-bill-morneau

 

https://www.fin.gc.ca/activty/consult/tppc-pfsp-eng.pdf