Page 69

Notes

(1) The small business income thresholds shown in the table apply to active business income

earned by a Canadian-controlled private corporation (CCPC) that is eligible for the small

business rate of tax (see the tables “Federal and Provincial /Territorial Tax Rates for Income

Earned by a CCPC Effective January 1, 2013 and 2014” and “Combined Federal and

Provincial/Territorial Tax Rates for Income Earned by a CCPC Effective January 1, 2013 and

2014”). All thresholds must be shared by associated corporations.

(2) The federal small business threshold is reduced on a straight-line basis when the

associated group’s taxable capital (as computed by what was previously referred to as

Large Corporations Tax) employed in Canada in the preceding year is between $10 million

and $15 million. This clawback applies to all provinces, with the exception of Ontario (see

note (4) below).

(3) Manitoba’s small business income threshold will increase to $425,000 (from $400,000) on

January 1, 2014.

(4) Previously, Ontario levied a surtax at a rate of 4.25% on CCPCs claiming the Ontario small

business deduction in order to gradually reduce the benefit of the deduction where taxable

income exceeded the small business income threshold. Based on the small business limit

of $500,000, the phase-out range for the application of the surtax was between $500,000

and $1.5 million. The province eliminated this small business deduction surtax effective

July 1, 2010 and, as a result, all CCPCs will benefit from the small business deduction on

the first $500,000 of active business income (shared between associated corporations)

irrespective of the corporation’s taxable income.

(5) Québec’s small business deduction is available to CCPCs with paid-up capital (on an

associated basis) of less than $10 million, and is phased out for CCPCs with paid-up capital

between $10 and $15 million.

(6) Nova Scotia’s small business income threshold will decrease to $350,000 (from $400,000)

effective January 1, 2014.

Small Business Income Thresholds / 63

Current as of September 30, 2013