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Canada's Small Firms Concerned Over Tax Reforms

by Mike Godfrey, Tax-news.com, Washington

24 July 2017


The Canadian Federation of Independent Businesses (CFIB) has raised concerns over the possible impact on SMEs of the Government's plans to crack down on tax planning strategies that involve private corporations.

The Government is consulting on three tax practices it believes are being used to gain unfair tax advantages: income sprinkling between family members, the retention of passive investments in a corporation, and the converting of a private corporation's regular income into capital gains.

According to CFIB, the proposed changes could affect the legitimate ways in which small firms share income among family members. It estimates that nearly 70 percent of its members employ family in their small business.

Corinne Pohlmann, CFIB's Senior VP of National Affairs, said: "These proposed changes may create uncertainty at a time when small businesses need reassurances from their governments. With fresh US demands for NAFTA changes, and several years of payroll taxes increases looming, the last thing small business owners need is uncertainty when they are doing their business tax planning."

She added: "It needs to be noted that the vast majority of Canada's small businesses are run by law-abiding, tax-paying citizens firmly planted in Canada's middle class."

TAGS: capital gains tax (CGT) | compliance | tax | investment | small business | business | tax compliance | law | corporation tax | payroll | small and medium-sized enterprises (SME) | tax planning | Canada | individual income tax

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