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TAX BULLETIN - ARCHIVES 2017
  • Interest rates for the fourth calendar quarter

  • Guidance on the application of the split income rules for adults

  • The Québec Economic Plan - November 2017 Update (Minister of finance of Qc)

  • Fall Economic Statement 2017 (Minister of Finance of Canada)

  • Reduction of the small business tax rate to 10 per cent, effective January 1, 2018, and to 9 per cent, effective January 1, 2019 (Minister of Finance of Canada)

  • Interest rates for the third calendar quarter

  • Tax Planning Using Private Corporations (Minister of Finance of Canada)

  • Extracts from the documents The Quebec Economic Plan and Additional Information on the Fiscal Measures (Minister of Finance of Quebec):

    • Surplus $M: 2017 2292, 2018 2488, 2019 2834.

    • The health contribution will be eliminated retroactively, as of 2016, for all adults whose income for that year does not exceed $134 095.

    • Additional capital cost allowance where a business acquires manufacturing or processing equipment and computer equipment before April 1, 2019.

    • In accordance with the qualification criteria announced, a corporation may deduct, in respect of a taxation year, an amount equal to the maximum SBD rate applicable for the taxation year, where:
      — its employees accumulate a minimum number of hours worked; or
      — it is a corporation in the primary or manufacturing sector.20
      More specifically, a corporation meets, for a taxation year, the qualification criterion concerning the minimum number of hours worked if, as applicable:
      — during the taxation year, its employees worked at least 5 500 hours;
      — during the previous taxation year, the hours worked by its employees and the employees of the corporations with which it is associated total at least 5 500 hours (hereinafter, “previous year consolidated basis test”).

  • Extracts from the documents  Budget Plan and Tax Measures - Supplementary Information (Minister of Finance of Canada):

    • Final budgetary balance $G: 2017-23.0 2018 -28.5 2019 -27.4 2020 -23.4 2021 -21,7 2022 -18.8.

    • Budget 2017 proposes to amend the definition of a taxi business to require providers of ride-sharing services to register for the GST/HST and charge tax on their fares in the same manner as taxi operators.

    • The excise duty rate on cigarettes will increase from $0.52575 to $0.53900 for each five cigarettes or fraction thereof (i.e., from $21.03 to $21.56 per 200 cigarettes). Budget 2017 also proposes that inventories of cigarettes held by manufacturers, importers, wholesalers and retailers at the end of Budget Day be subject to a tax of $0.00265 per cigarette (subject to certain exemptions).

    • Budget 2017 proposes that excise duty rates on alcohol products be increased by 2 per cent effective the day after Budget Day, in respect of duty that becomes payable after that date. No special inventory tax will apply to alcohol products on which duty has been paid.

  • Interest rates for the second calendar quarter

  • 2017 Automobile Deduction Limits and Expense Benefit Rates for Business 

  • EI premium rates and maximums

  • Rates, thresholds and amounts related to source deductions and contributions for 2017

  • Interest rates for the first calendar quarter

  • Extracts from CCH Tax Reference Booklet 2016-2017

    Personal Income Tax Rates - Québec (2016) 1   Corporate Income Tax Rate - Québec (12/31)1 2017 2016
    Income Tax Bracket       $ Effective Rate      %       Marginal Rate   % %
    Interest & Ordinary Income  % Capital Gains % Canadian Dividends   Income eligible to SBD 18.50 18.50
    Eligible      % Non-Eligible %   Investment income of a CCPC    
    11 474   0.00 12.53 6.26 -0.02à 0.00 4.38    Net of dividend tax retund 19.90 19.90
    14 438 2.57 28.53 14.26 5.64 à 5.66 14.85    Without dividend tax refund 50.57 46.57
    42 390 19.69 32.53 16.26 11.16 à 11.18 19.53   Other income 26.90 26.90
    45 282 20.51 37.12 18.56 17.49 24.90        
    84 780 28.24 41.12 20.56 23.01 29.58        
    90 563 29.07 45.71 22.86 29.35 34.95        
    103 150 31.1 47.46 23.73 31.77 37.00        
    140 388 35.44 49.97 24.98 35.22 39.93        
    200 000 39.77 53.31 26.65 39.83 43.84        
  • Comparison of salary vs dividend for a shareholder owning 40% or more of the shares of a CCPC whose taxable is $500k or lower:

    Income Tax Bracket       $ 1 Salary vs Dividend Scenarios 2
    Salary Dividend Advant. Div.
    Company Employee Company Shareholder
    Inc  Bef Sal Sal Ben 3 Inc Tx 1 Ben 3 Net Inc Bef Sal Inc Tx Div Inc Tx 1 Net
    11 474 100.00 -90.63 -9.37% -12.53% -5.95% 73.88 100.00 -18.50% 81.50 -3.92% 78.31 4.43
    14 438 100.00 -90.63 -9.37% -28.53% -5.95% 59.38 100.00 -18.50% 81.50 -14.49% 69.69 10.31
    42 390 100.00 -90.63 -9.37% -32.53% -5.95% 55.76 100.00 -18.50% 81.50 -19.21% 65.84 10.08
    45 282 100.00 -90.63 -9.37% -37.12% -5.95% 51.60 100.00 -18.50% 81.50 -26.10% 60.23 8.63
    84 780 100.00 -97.50 -2.50% -41.12%   57.41 100.00 -18.50% 81.50 -30.82% 56.38 -1.03
    90 563 100.00 -97.50 -2.50% -45.71%   52.93 100.00 -18.50% 81.50 -34.76% 53.17 0.24
    103 150 100.00 -97.50 -2.50% -47.46%   51.23 100.00 -18.50% 81.50 -36.83% 51.48 0.25
    140 388 100.00 -97.50 -2.50% -49.97%   48.78 100.00 -18.50% 81.50 -39.78% 49.08 0.30
    200 000 100.00 -97.50 -2.50% -53.31%   45.52 100.00 -18.50% 81.50 -39.78% 49.08 3.56

    1  Extracts from CCH Tax Reference Booklet 2016-2017.

    2 Taking into account the company income tax rate of 18.5% in 2017 and the cost of salary benefits 3 , assuming also that $100 before tax is available in the company for distribution to its shareholders owning 40% or more of shares ,  the dividend  has a slight advantage over the salary as shown in the last column of the table. Note also that the advantage of the dividend would be higher for a shareholder owning less than 40% of shares due to the fact that he must contribute to EI. On the other hand, the advantage would be reversed in favor of the salary if taxable income was > $500k, even taking into account  the fact that the dividend would be eligible on the excess.

    3 The cost of salary benefits of 5.95% for the employee and 9.37% for the employer  in 2017 details as follows: QPP 5.4% for the employee and 5.4% for the employer  up to $55 300, QPIP 0.548% for the employee and 0.767% for the employer up to $72 500, QHIP 2.5% for the employer & CNT 0.7% for the employer up to $72 500 but not taking into account EI 1.63% for the employee and 2.28% for the employer.