Federal budget 2019: Ottawa to lift cap on small business income tax credit

  • 📰 globeandmail
  • ⏱ Reading Time:
  • 32 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 16%
  • Publisher: 92%

Business News News

Business Business Latest News,Business Business Headlines

Federal budget 2019: Ottawa to lift cap on small business income tax credit GlobeSmallBiz

Experts say the policy has had the perverse effect of prompting companies to pay out income in salaries to employees rather than reinvesting in the business – just to stay below the income threshold.“For small companies, it was a pretty common problem,” said Bruce Ball, vice-president of taxation for the Chartered Professional Accountants of Canada. “This will be a welcome change for them.”

The government’s Scientific Research and Experimental Development Program offers small Canadian-controlled private companies refundable tax credits of up to 35 per cent on the first $3-million a year they spend on R&D expenditures and non-refundable credits of 15 per cent for all other companies. The program costs the government roughly $3-billion a year and is used by more than 20,000 companies.

The budget eliminates the income test, effective with the current tax year. The government is keeping in place a $10-million limit on how much capital a company can have to qualify for the refundable credit.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 5. in BUSİNESS

Business Business Latest News, Business Business Headlines