This highlights summary addresses issues that we believe are most relevant to our privately-owned business clientele. We will have a complete commentary on Thursday morning once we have had an opportunity to review the full Budget details.
The Budget is principally an expenditure document in that the government has brought forward a large number of initiatives that will require additional public funding. The tax measures are the means through which they hope to pay for them.
Key relevant changes include:
– a broadening of the definitions of associated corporations to limit access to incentives such as the Small Business Deduction and Scientific Research & Experimental Development claims;
– a new requirement for professional firms to recognize work in progress as income;
– a new initiative being called Private Corporation Review which will result in CRA examination of compensation and dividends paid to business owners and members of their families with a view to curtail tax minimization through income splitting;
– an additional allocation of $523 million over 5 years for personnel devoted to detect underground economy and other tax evasion activities;
Please contact Jerry Paskowitz, CPA, CA, CMC, Partner (firstname.lastname@example.org) or Robert McGaghran, CPA, CA, Tax Manager (email@example.com) for any questions related to the 2017 Canadian Federal Budget.