Personal Investor: 2019 small business tax break has strings attached
This year, small businesses in Canada will get a reduced tax rate on the first $500,000 earned from 10 percent to 9 percent. However, if businesses hold over $50,000 in passive income, the tax rate will change based on the excess amount. It’s estimated small businesses with an annual income of $107,000 will save about $1600; giving small business an advantage – provided they do not have passive income. Larger small businesses that have high passive income likely won’t be able to benefit from the reduced rate.
“If the business holds more than $50,000 in what is termed “passive income” that corporate tax rate moves up depending on the excess amount.”