By Meghan Davis, CPA, CA, TEP / May 18, 2018

Implications of 2018 Budget on Tax for Private Corporations

As many Canadians are aware, the Department of Finance has made major changes to the taxation of shareholders effective for 2018. What used to be known as “kiddie tax” is now referred to as “tax on split income” or “TOSI” and it can potentially apply to almost anyone with residency ties to Canada. The budget also introduced new rules for corporations earning passive income, which will become effective in 2019. As a result, incorporated professionals are more restricted in their tax planning, leading some to ask: “Is it still worth it”? The classic tax-planning answer, of course, is “it depends”. This article explains some of the recent tax law changes, and considers some situations where professional corporations (“PCs”) may still offer tax and financial planning benefits.



This article appeared in the Spring 2018 issue of our newsletter, “Interest Gained”. To read the full newsletter, please click here.