Bill C-2 changes tax rates for individuals and trusts.
It also contains consequential changes affecting Canadian controlled private corporations. The bill reduces the federal personal income tax rate on income between $45,283 and $90,563 to 20.5% (from 22%) and increases the personal income tax rate on income over $200,000 by four percent, so that it is 33% (from 29%), starting January 1, 2016.
The bill also reduces the Tax-Free Savings Account contribution limit to $5,500 per year (from $10,000 per year), starting in 2016.
Bill C-2 is enacted for U.S. GAAP purposes on December 15, 2016, the date the bill received Royal Assent. Bill C-2 was substantively enacted for the purposes of IFRS and Accounting Standards for Private Enterprise as of December 9, 2015, which is when it received first reading.
Impact on Canadian controlled private corporations
Bill C-2 also makes changes to several tax measures that affect Canadian controlled private corporations. The bill includes measures that:
For more information, contact your KPMG adviser.
Information is current to December 20, 2016. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500