Prime Minister Justin Trudeau and Finance Minister Bill Morneau announced that the small business tax rate would decrease to 9% (from 10.5%) by 2019 as part of new changes to the private company tax proposals.
While the government stated that it is committed to its proposed private company tax measures to address tax planning involving income sprinkling effective January 1, 2018, it is cancelling changes to limit access to the Lifetime Capital Gains Exemption (LCGE).
Finance is cancelling proposed measures to address income sprinkling by multiplying the LCGE across multiple family members. Finance further notes that it intends to address unintended consequences of its passive income proposals. Finance has not yet provided further details on how it will address the unintended consequences that were identified.
Authored by KPMG TaxNewsFlash – Canada October 16, 2017 No. 2017-46
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