New tax rules for small businesses in Canada | Business Lawyer
The Federal Government of Canada recently announced major changes to small business taxation. If you own an incorporated small business then this blog is meant for you, in this blog I will review these new tax changes and explain how they may impact you. Increase in dividend tax The government will increase the tax on dividends paid to family members that are shareholders of a small business corporation effective January 1st 2018. For example, assume that Mrs. Nancy Johnson and Mr. Kevin Johnson are shareholders in a medical professional corporation Nancy's the sole doctor and works in the corporation while her husband is a non active shareholder, every year the corporation pays Nancy and Kevin a dividend of $100,000 each in respect of their shareholders. Under the previous rules Nancy and Kevin each pay tax at regular tax rates on the dividends they received in the year, under the new rules the dividends paid to Kevin are taxed at the highest marginal rate this is because
