If you are a small business owner in Canada, the rules have changed on taxing passive income within your business.
The new rules will eventually raise another $1 billion for government coffers in additional tax revenue.
Passive income is money earned that is not directly tied to the business of the company, such as stocks and bonds or interest income, which will now have a $50,000 annual ceiling for the lower small business tax rate.
That rate is slated to drop to nine per cent in 2019, down from 10.5 per cent in 2017 and 10 per cent this year.
The tax rate will climb on any income above the $50,000 level, eventually reaching a maximum of 15 per cent on income above $150,000 a year.
“It’s a less bad way of approaching this,” says the Canadian Federation of Independent Business. “But this will still take $1 billion out of the hands of business owners.”
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