Log in or register
Share on LinkedInShare on LinkedIn

ARTICLE · 27 AUGUST 2024

Canada's New Entrepreneurs' Incentive: A Look At The Draft Legislation

Lawson Lundell LLP
Explore more from Lawson Lundell LLP

On August 12, the Department of Finance Canada ("Finance Canada") released proposed amendments to the Income Tax Act (the "Act") implementing the new Canadian Entrepreneurs' Incentive (the "Incentive").

CanadaTax
Max Walker
Max Walker
Katie Bois
Katie Bois
Author LinkedIn connections

On August 12, the Department of Finance Canada ("Finance Canada") released proposed amendments to the Income Tax Act (the "Act") implementing the new Canadian Entrepreneurs' Incentive (the "Incentive"). The Incentive aims to reduce the capital gains inclusion rate to one-third on a lifetime maximum of $2 million in eligible capital gains.

The Incentive will apply to taxation years after 2024.

Background

The Incentive was introduced in April as part of the 2024 federal budget ("Budget 2024") to mitigate the impact of the increased capital gains inclusion rate for Canadian entrepreneurs. The Incentive was announced alongside other tax changes that alter the way capital gains are taxed, such as circumstantially increasing the capital gains inclusion rate from 1/2 to 2/3.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Understanding Canada’s new "Productivity Mega Deduction": Broad-based, immediate, and permanent expensing

Canada's new Productivity Mega Deduction promises to slash the marginal effective tax rate on business investment to just 6.4%, positioning the country as the most competitive G7 nation for capital deployment. This permanent tax incentive extends immediate expensing to roughly 65% of capital assets, fundamentally reshaping the economics of investing in Canadian operations across manufacturing, energy, technology, and resource sectors.
CanadaTax
Gowling WLG
Gowling WLG
Article

Advance Income Tax Ruling Requests For “major Investments” In Canada To Take Priority

The Canada Revenue Agency has announced a new policy to prioritize advance income tax ruling requests for investments of $1 billion or more in Canada. This initiative aims to provide greater tax certainty and reduce risks for major investors, potentially accelerating large-scale project development and strengthening Canada's economic competitiveness. However, questions remain about implementation timelines and potential impacts on smaller ruling requests.
CanadaTax
Gowling WLG
Gowling WLG
Article

Update: Bare Trust Reporting Rules For 2026

The federal government has finalized revised reporting rules for bare trusts, significantly narrowing the original requirements. While bare trusts are generally exempt from filing for 2023-2025, certain arrangements involving separated legal and beneficial ownership will face new filing obligations starting with the 2026 taxation year, with specific exemptions for family trusts, joint ownership arrangements, and principal residences.
CanadaTax
Fogler, Rubinoff LLP
Fogler, Rubinoff LLP