2017 Proposed Tax Changes for Private Corporations

Proposed Tax Changes for Private Corporations

Since the initial release of the Department of Finance’s proposals with respect to the taxation of private corporations in July there have been significant discussions amongst business owners, their advisors and their representatives in government.  The implications of these changes are significant and there may be a very limited time to ensure your business is put in the best position to deal with these potential changes.  Despite what some of the coverage of these measures indicates, these measures will not just affect the 1%, they can affect all private corporations.
 
The Department of Finance  is targeting three main areas of perceived tax avoidance by private corporations with these proposals:
 

• Income splitting using “dividend sprinkling” and multiplication of the lifetime Capital gains exemption (LCGE);
• Investing in passive assets; and
• Converting dividends into capital gains.