If you own a private corporation, proposed tax changes may upset some of your family's tax plans.
Finance Minister Bill Morneau's recent announcements that the government will amend its proposed private company tax changes have come as a relief to private business owners across Canada. Finance Minister Morneau made a series of announcements stating that the government intends to modify or abandon some of its more controversial proposals that had small business owners concerned.
In addition, the government stated that it intends to reduce the small business tax rate to 9% by 2019 (from its current rate of 10.5%). These changes follow a chorus of concern from Canada's small business community in response to the proposed private company tax changes. Canadians provided more than 21,000 submissions to our government regarding their views on these controversial proposals.
These announcements were a positive sign that the government is actively listening to a wide range of experts—including KPMG—who have recommended further study of the proposed private company tax reforms during the consultation period.
However, there will still be some uncertainty as to how the government intends to implement these changes until draft legislation is officially issued. In the meantime, private business owners will want to determine how these recent announcements will impact their businesses, as well as their individual tax situations.
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