Increasing access to the small business tax rate

Canadian Controlled Private Corporations (CCPCs) can benefit from a tax rate of 9 per cent on up to $500,000 of active business income compared to the general corporate tax rate of 15 per cent. Access to this preferential rate begins to be phased out when a CCPC’s taxable capital employed in Canada exceeds $10 million and is fully phased out when taxable capital reaches $15 million.

Budget 2022 proposes to phase out access to the small business tax rate more gradually, with access to be fully phased out when taxable capital employed in Canada reaches $50 million, rather than at $15 million.