Department of Finance Comments
From the Department of Finance website:
The Government of Canada is committed to fixing a tax system where wealthy and high income individuals are encouraged to use their private corporations to pay lower tax rates than middle class Canadians. The Government has listened to small business owners, professionals and experts during the consultation on tax planning using private corporations, and will act on what it has heard. ...
The Government will base its next steps on the following key principles. We will:
- Support small businesses and their contributions to our communities and our economy.
- Keep taxes low for small businesses, and support owners to actively invest in their growth, create jobs, strengthen entrepreneurship and grow our economy.
- Avoid creating unnecessary red tape for hard-working small businesses.
- Recognize the importance of maintaining family farms, and work with Canadians to ensure we don't affect the transfer of a family business to the next generation.
- Conduct a gender-based analysis on finalized proposals, to ensure any changes to the tax system promote gender equity. About 83 per cent of passive investment income is earned by Canadian-controlled private corporation (CCPC) owners making more than $250,000. About 70 per cent of these individuals are men.
Avail CPA will continue to monitor the federal government's response and decisions. Talk to your accountant today for more information about how the proposed changes may affect you.