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Federal Government announces reduction in Small Business Corporate Income Tax Rate

Posted by Ryan Rawluk Posted on 16 Oct 2017

On October 16, 2017, the federal government announced a reduction in the Small Business Corporate Income Tax Rate.  The current rate is 10.5% after it had been previously reduced from 11% effective January 1, 2016. 

The reduction will occur in two steps.  The rate will be reduced to 10% on January 1, 2018 and further reduced to 9% on January 1, 2019.

The government also signaled that the non-eligible dividend tax rate will be increased on January 1, 2019 to compensate for the change in corporate tax rates.

As Manitoba's Small Business Corporate Income Tax Rate is already zero, Manitoba corporations will be subject to the above rates.