February 2017 Newsletter

There are various provisions in the Income Tax Act that prevent you from taking money or property of a corporation on a tax-free basis. Two of the main provisions are discussed below. One applies to shareholder benefits, and the other to certain shareholder loans.

There are various tax rules that apply to trusts and their beneficiaries. Below is a summary of some of the main rules.

Each December, the Department of Finance publishes certain amounts and rates that apply for the purposes of computing automobile benefits for employees and the amounts that may be deducted for the use of a car in business or employment activities. The Department recently released the rates for 2017.

Small business deduction denied

A Canadian-controlled private corporation (CCPC) can claim the small business deduction to reduce its federal tax rate from the general 15% rate to 10.5%. The corresponding provincial rate is also reduced. However, the federal small business deduction applies only to the first $500,000 of active business income per year (with adjustments in certain cases).