The Canadian government continues to boast about their plans to further reduce income tax for corporations in an effort to attract additional investment from outside its borders.
Some of the tax changes include:
- Substantial, broad-based tax reductions that are lowering the federal general corporate income tax rate from 22.12 per cent (including the corporate surtax) in 2007 to 15 per cent in 2012. These tax reductions include the elimination of the corporate surtax in 2008 for all corporations and a reduction in the federal general corporate income tax rate to 18 per cent as of January 1, 2010.
- A reduction of the federal income tax rate applying to qualifying small business income to 11 per cent in 2008, and an increase in the amount of income eligible for this rate to $500,000 in 2009.
- Alignment of capital cost allowance rates for a number of assets to better reflect their useful life—this both reduces the tax burden on investment and ensures neutral tax treatment of different capital assets, encouraging investment to flow to its most productive uses.
- Elimination in 2006 of the federal capital tax, and the introduction in 2007 of a temporary financial incentive to encourage provinces to eliminate their general capital taxes and dto eliminate or replace their capital taxes on financial institutions with a minimum tax. All provincial general capital taxes will be eliminated by 2012.
The full release can be viewed here.