INDEPTH: FEDERAL BUDGET 2006
Business Tax Measures
CBC News Online | May 2, 2006
The GST cut may have garnered the most attention but Finance Minister Jim Flaherty's first budget also includes tax measures aimed at Canadian businesses.
"To excel in the global economy, Canada needs a competitive business tax system," Flaherty said in his budget address.
Corporate
The Conservatives' 2006 budget includes some measures that mirror what the former Liberal government intended to do when it released its economic and fiscal update in November 2005:
- The general corporate tax rate will be cut to 19 per cent from 21 per cent by 2010.
- The corporate surtax for all businesses will be dropped by Jan. 1, 2008.
- The federal capital tax is eliminated, retroactive to Jan. 1, 2006.
Small business
The following are new measures, costing federal coffers a total of $10 million in 2006-07 and $80 million in 2007-08:
- The amount of small business income that will be taxed at the 12-per-cent rate will rise to $400,000 from $300,000, effective Jan. 1, 2007.
- The 12-per-cent tax rate for small businesses will be cut to 11.5 per cent in 2008 and to 11 per cent in 2009.
Other
- A new tax credit of up to $2,000 will be available to employers who hire apprentices in the skilled trades. Estimated cost: $190 million in 2006-07, $200 million in 2007-08.
- The non-capital-loss carry-forward will be extended to 20 years from 10 years.
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