Canada: Small business deduction changes proposed in 2023 budget (Ontario)
Proposed changes to phase out small business deduction for corporations with taxable capital employed in Canada
Small business deduction changes proposed in 2023 budget (Ontario)
Ontario’s 2023 budget implementation bill, which received first reading on 23 March 2023, includes proposed changes to phase out the small business deduction for corporations with taxable capital employed in Canada between $10 million* and $50 million (previously the phase-out occurred between $10 million and $15 million of taxable capital)—effective for tax years beginning on or after 7 April 2022.
The proposed measure was announced in Ontario’s 2022 Fall Economic Update and harmonizes with the recent federal amendment to allow more medium-sized Canadian-controlled private corporations to benefit from the small business deduction.
Ontario’s 2023 budget also includes a newly proposed 10% refundable manufacturing investment tax credit, among other changes. Read TaxNewsFlash
Read an April 2023 report prepared by the KPMG member firm in Canada
*$=Canadian dollar
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