By Carole Chouinard , [email protected]
Published 4/1/00
The following proposed measures introduced in the February 28, 2000 budget will be of interest to high tech companies and their employees and shareholders:
Capital Gains Inclusion Rate
Effective February 28, 2000, only 2/3 of capital gains will be taxable. Currently, 3/4 of capital gains are taxable. As a result of this change, capital gains will be taxed at about the same rate as dividends. This measure may be of benefit to the high technology sector by making the acquisition of shares in such companies and therefore, access to capital, more appealing from a tax perspective.
Employee Stock Options
When a stock option is granted, i.e., the stock option agreement is entered into, there are no tax consequences to the employee. Instead, the employee has a taxable employment benefit when the employee exercises the options and acquires shares, subject to the comments below regarding shares of a Canadian-controlled
