Backgrounder
Key Tax Measures and Additional Tax Measures Coming into Effect in 2018
Key Tax Measures Taking Effect in 2018
| Measure |
Change in 2018 |
Announcement |
| Small business tax rate |
As proposed in the Fall Economic Statement, the 10.5-per-cent federal small business rate will be reduced to 10 per cent as of January 1, 2018, and to 9 per cent effective January 1, 2019. |
Fall Economic Statement 2017 |
| Income sprinkling |
As part of its commitment to tax fairness, the Government is moving forward on restricting income sprinkling by private corporations, effective for the 2018 and subsequent taxation years. Family members who make meaningful contributions to a family business will not be affected. Owners of private corporations will have until the end of 2018 to adjust to the proposed exclusion for significant shareholdings. |
Fall Economic Statement 2017 |
| Canada Child Benefit (CCB) |
The Government will strengthen the CCB by increasing the benefits annually to keep pace with the rising cost of living as of July 2018 by indexing the CCB to inflation. |
Fall Economic Statement 2017 |
Additional Tax Measures
| Measure |
Change in 2018 |
Announcement |
| Dividend Tax Credit |
The taxation of non-eligible dividends (generally dividends distributed from corporate income taxed at the small business tax rate) will be adjusted to reflect the reduction in the small business tax rate. |
Fall Economic Statement 2017 |
| Home Relocation Loans Deduction |
Eligible home relocation loans are loans used to acquire a new residence where the employee starts work at a new location. The Home Relocation Loans Deduction will be eliminated for 2018 and subsequent taxation years. |
Budget 2017 |
| Reinstatement of Newfoundland and Labrador’s 10-per-cent provincial point-of-sale HST rebate on printed books |
Effective January 1, 2018, a point-of-sale rebate of the Newfoundland and Labrador provincial portion of the Harmonized Sales Tax (10 per cent) will apply to any sales of printed books in the Province. |
Newfoundland and Labrador News Release (Minister of Finance) on August 22, 2017 |
| Extending Rules Allowing the Reorganization of Investment Funds on a Tax-Deferred Basis |
Budget 2017 announced changes to rules allowing certain investment funds to reorganize on a tax-deferred basis. The rules are extended to segregated funds. |
Budget 2017 |
| GST/HST Rebate to Non-Residents for Tour Package Accommodations |
The rebate allowed non-residents who bought an eligible Canadian tour package to recover the GST/HST paid on the accommodation portion of the tour package. The repeal of this rebate generally applied as of March 22, 2017, the release date of the 2017 Budget. As a transitional measure, however, the rebate continued to be available for supplies of eligible tour packages or accommodations made after this date, but before January 1, 2018 provided that it was paid in full by then. |
Budget 2017 |
| First-Time Donor’s Super Credit |
The First-Time Donor's Super Credit was a temporary 5-year measure introduced in Budget 2013. It will be allowed to expire at the end of 2017 as planned. The last opportunity for new donors to claim this credit will be when they file their tax returns for the 2017 tax year in early 2018. |
Budget 2013 |
| Accelerated Capital Cost Allowance (CCA) for Mining |
Budget 2013 announced the phase out of the accelerated CCA rate for mining. The accelerated CCA takes the form of an additional allowance and allows the taxpayer to deduct up to 100 per cent of the remaining cost of eligible assets (not exceeding the taxpayer’s income for the year from the mining project). As part of that phase out, the percentage of the additional allowance that a taxpayer can claim will be reduced from 90 per cent in 2017 to 80 per cent in 2018. |
Budget 2013 |
| Pre-Production Mine Development Expenses |
Budget 2013 announced a reduction in the deduction rate for pre-production intangible mine development expenses. As part of that phase-out, the current percentage of such expenses that can be claimed as Canadian Exploration Expenses will be eliminated completely from its current level of 30 per cent. As a result, all of these expenses will now be claimed as Canadian Development Expenses. |
Budget 2013 |
