Tax breaks for small businesses in Canada
The Canadian Government announced that its new Small Business Job Credit will save firms more than CAD550m (USD500.5m) in payroll taxes over the next two years.
The credit is worth the difference between premiums paid at the legislated rate of CAD1.88 per CAD100 of insurable earnings and the reduced small business rate of CAD1.60 per CAD100 of insurable earnings. It will apply in 2015 and 2016. Any firm that pays employer insurance (EI) premiums equal to or less than CAD15,000 in those years will be eligible for the credit.
Businesses will not need to apply for the credit. The Canada Revenue Agency (CRA) will automatically calculate the credit on a business return. It will then be applied against any outstanding debt and any remaining amount will be refunded to the company.
In favor of the announcement, Dan Kelly, President of the Canadian Federation of Independent Business, said: “This is a big one. This announcement will result in a 15 percent net reduction in Employment Insurance premiums paid by small businesses over the next two years. A 15 percent reduction in EI premiums will make it easier to hire new workers or invest in additional training to help entrepreneurs grow their business.”
Finance Minister Joe Oliver said: “Small businesses drive Canadian prosperity, representing about 50 percent of jobs in the private sector and a third of Canada’s gross domestic product. This is why we are taking action to make small businesses stronger. Our new Small Business Job Credit will lower taxes for business owners and make it easier for them to create jobs for Canadians.”
Source: taxnews-Tax breaks for small businesses in Canada
