Tax Measures

Corporate Tax Rate – Effective January 1, 2018, the Ontario small business corporate tax rate on active business income will decrease by 1% from 4.5% to 3.5%. The combined Federal and Provincial corporate tax rates will be as follows:

 

Taxable Income ($)

 

2018 Combined Tax Rate (%)

 

2019 Combined Tax Rate (%)

 

0 – 500,000

 

13.50

 

12.50

 

500,001+

 

26.50

 

26.50

The above tax rates would apply to:

  • Professional corporations
  • Technical service corporations
  • Hygiene service corporations
  • Other Canadian controlled private corporations with active business income

If your corporation’s fiscal year-end is other than December 31, then the new corporate rate will be pro-rated based on the period before and after these effective dates.

As a result of the decrease in Federal and Provincial small business corporate tax rates, the projected increase in the top personal marginal dividend tax rates for regular, non-eligible dividends are as follows:

 

2017

 

2018

 

2019

 

45.30%

 

46.65%

 

47.40%

There are no changes to the top personal marginal tax rates for other types of income:

  • Self-employment/employment/other income – 53.53%
  • Taxable capital gains – 26.76%
  • Eligible dividends – 39.34%

This summary was prepared by DCY Professional Corporation Chartered Accountants who have been advising dentists/doctors for decades. Additional information can be obtained by phone (416) 510-8888, fax (416) 510-2699, or e-mail david@dcy.ca.  Visit our website at: www.dcy.ca. This article is intended to present tax saving and planning ideas and is not intended to replace professional advice.