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T2 Tax Return – Changes Affecting T2 Tax Returns

The Tax Season is upon us!  As your Corporate Tax Accountant in Oakville and Mississauga, I have summarized the 2016 Income Tax changes, which may affect our clients’ T2 Tax Return (T2 Corporation Income Tax Return) one way or another, depending on your own situation of course. Feel free to call us at 416.454.8812 or email at mina.hanna@accountingontrack.com if you have any questions.

Corporate Taxes – T2 Corporation Income Tax Return

1- No Changes to the corporate tax rate

No changes have been proposed to the corporate tax rate on active business income, which is 15.5% during 2016. Unless there are further changes, any active business income generated during 2016 will be taxed at 15.5%.

2- Higher taxes on investment income inside corporation

There will be a 4% increase on corporate taxes on investment income earned inside a CCPC Canadian-controlled private corporation. This raises the corporate tax rate on investment income from 46.17% to 50.17%.

3- Higher taxes on dividend income inside professional corporation / holding company

There will be a 5% increase on corporate taxes on dividends received from most Canadian corporations. These taxes are refundable to the corporation if and when dividends are issued/paid to shareholders.