Since this bill received first reading and Newfoundland has a majority government, the measures are considered substantively enacted for purposes of IFRS and ASPE as of May 26, 2014.
Corporate income tax
The budget announced that it would reduce the small business corporate income tax rate to 3% (from 4%) effective July 1, 2014.
Personal income tax
The bill decreases the eligible dividend tax credit rate to 5.4% (from 11.0%) effective July 1, 2014. This change is intended to make the effective tax rate on eligible dividends equivalent to the effective tax rate on non-eligible dividends. The bill also decreases the provincial non-eligible dividend tax credit rate to 4.1% (from 5.0%) to maintain the current level of provincial taxation on non-eligible dividends. This change is a result of the 2013 federal budget changes to the taxation of non-eligible dividends which are effective for 2014. The bill also increases the Low-Income Tax Reduction income thresholds by $1,000 for single individuals and by $2,000 for families.
For more information, please see TaxNewsFlash-Canada 2014-21, "Highlights of the 2014 Newfoundland and Labrador Budget", or contact your KPMG adviser.
Information is current to June 03, 2014. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500