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TAX BULLETIN

  • 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.

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