Ontario to Reduce Small Business Tax Rate

 In Alerts, Corporate Income Tax, News, Tax, Wolters Kluwer

Minister of Finance, Charles Sousa, presented the Ontario 2017 Fall Statement on November 14, 2017. The statement announced updated fiscal projections and many new measures. With respect to tax, the primary announcement was regarding the small business corporate tax rate. Currently at 4.5%, the small business rate will decrease to 3.5%, effective January 1, 2018. The non-eligible dividend tax credit rate will decrease by one percentage point to 3.2863 per cent as of January 1, 2018. Although the government previously suggested that the general corporate tax rate will be reduced if the 2017-2018 budget is balanced (which is projected to occur), the announcement did not mention if the government intends to move forward with reducing the general rate.

The announcement also includes the new Graduated Apprenticeship Grant for Employers (GAGE). As a result of this new apprenticeship grant, the apprenticeship training tax credit (ATTC) is eliminated for employers who register in an apprenticeship program after November 14, 2017. Employers with apprentices already registered in an eligible apprenticeship program on or before November 14, 2017 will continue to be eligible for the ATTC for up to 36 months.

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