by Mike Godfrey, Tax-news.com, Washington
08 May 2017
The Canadian Government has proposed extending the small business deduction to certain farmers and fishers.
The Government intends to amend the Income Tax Act to ensure that qualifying farmers and fishers selling to agricultural and fisheries cooperatives are eligible for the small business deduction in respect of income from those sales. The amendments would apply for taxation years that begin after March 21, 2016.
The small business deduction effectively reduces the rate of corporate income tax from 15 percent to 10.5 percent on the first CAD500,000 (USD365,281) of active business income earned by a Canadian-controlled private corporation.
The amendments are designed to ensure that recently enacted amendments to the Income Tax Act – intended to prevent the multiplication of the small business deduction – do not inappropriately deny access to the small business deduction for a farmer’s or a fisher’s corporation selling farming products or fishing catches to an arm’s length agricultural or fisheries cooperative.
Published at Sun, 07 May 2017 19:00:00 -0500