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ARTICLE · 01 APRIL 2016

Highlights Of Canada's 2016 Federal Budget

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The federal budget (Budget 2016) tabled on March 22 contains a number of proposed amendments to Canada's Income Tax Act.

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The federal budget (Budget 2016) tabled on March 22 (Budget Day) contains a number of proposed amendments to Canada's Income Tax Act (the Tax Act) as well as Part IX of Canada's Excise Tax Act (the GST Legislation). This bulletin focuses on (i) business income tax measures, (ii) international tax measures, (iii) GST/HST measures, (iv) other proposed tax measures, and (v) the status of outstanding tax measures.

Business Income Tax Measures

Small Business Taxation

1. Tax Rate

A corporation that is a Canadian-controlled private corporation (CCPC) throughout its taxation year is entitled to a small business deduction (SBD) that effectively results in its first $500,000 of active business income (ABI) being subject to federal tax at 10.5%. The 2015 federal budget (Budget 2015) previously proposed to provide for gradual reductions in the small business tax rate for 2017, 2018, 2019 and subsequent years. Budget 2016 proposes that the small business tax rate remain at

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