Active business income earned by a Canadian-controlled private corporation ("CCPC") that does not exceed the small business income threshold ($500,000 taxable income) is taxed at a reduced rate compared to that of other private and public corporations. The reduced rates are calculated using the small business deduction offered to CCPC’s. The current available rates are listed below:

  • The federal rate for 2017 is 10.5%, and will be reduced to 10% in 2018 and to 9% in 2019.

  • The provincial rate for Ontario (ON) for 2017 is 4.5%, for a combined federal and provincial rate of 15%. This will be reduced to 3.5% in 2018 for a combined total of 13.5%

 

  • The current provincial rate for British Columbia (BC) for 2017 and 2018 is 2%, for a combined federal and provincial rate of 12.5% for 2017 (effective April 1, 2017) and 12% for 2018.

 

  • The current provincial rate for Alberta (AB) for 2017 and 2018 is 2%, for a combined federal and provincial total of 12.5%. for 2017 and 12% for 2018

 

CCPC’s are taxed at the lower rates up until the max threshold of $500,000. Any amount over $500,000 is taxed at the general rate.

  • The current federal rate for 2017 and 2018 is 15%. This is calculated by reducing the 38% basic rate by 10% federal tax abatement and the general tax reduction of 13%.

 

  • The current provincial rate for Ontario (ON) for 2017 and 2018 is 11.5%, for a combined total of 26.5%

 

  • The provincial rate for British Columbia (BC) for 2017 is 11%, for a combined total of 26%. This provincial rate is set to increase in 2018 to 12%, for a combined total of 27%.

 

  • The current provincial rate for Alberta (AB) for 2017 and 2018 is 12%, for a combined total of 27%

The above information is of a general nature only and should not be relied upon for specific situations.  Click here for additional tax accounting services information. Call Marlies Y Hendricks, CPA at 416-766-3941 to discuss your best options and set up an appointment.