2017/2016 Tax Tables
1) Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).
2) Marginal tax rate for capital gains is a % of total capital gains (not taxable capital gains).
3) Gross-up rate for eligible dividends is 38%, and for non-eligible dividends is 17%.
4) Negative amounts can only be used to offset other income taxes payable (it is assumed the taxpayer has other income).
5) Salary and RRSP/RRIF withdrawals and other income are taxed at the same rates.
6) One can invest currently up to $5,500.00 per year or the cumulative amount you haven't contributed to date in a tax free savings account (TFSA).
Any income earned, capital gains or contributions can be withdrawn tax free. (Cumulative limit to 2017 is $52,000.00)
7) Ineligible dividends are defined as dividends paid by a Canadian company from income which is subject to the small business deduction.
Eligible dividends are dividends paid by a corporation taxed at high rates, generally paid by a public company or a dividend paid to an investment company originating from a public company and then paid through to an individual taxpayer.
8) The September 2017 British Columbia Budget contains a proposal that would increase the tax rate on other income, eligible dividends and ineligible dividends by 2.10% and capital gains by 1.05% for income over $150,000 for 2018 and subsequent years.
9) Canadian dividends and capital gains have a significant tax advantage. For tax payers with lower income dividends are particularly attractive
10) Capital gains are only taxed when realised. Accrued capital gains are tax deferred until disposal.
Negative amounts can only be used to offset other income taxes payable (It is assumed the taxpayer has other income)
The Combined Corporate Tax Rates (Federal & British Columbia)
General 26.7% 26.0%
Small Business 13.0% 13.0%
Investments 49.7% 49.7%
The September 2017 British Columbia Budget contains proposals that would decrease the small business rate to 12.67% for 2017 and to 12.57% for 2018 and increase the general rate and investment income rates by 1% for 2018
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