In addition to personal income tax increases, the Alberta NDP government has also increased general corporate tax rates.
However, businesses that earn $500,000 or less of active business income will not be affected by the tax increases due to an offsetting increase to the Alberta small business deduction rate. Businesses that have more than 500,000 of active income or that have to share the small business deduction are affected. As well, any investment income earned in an Alberta corporation will be affected in a similar way.
The corporate tax rate increases will be effective as of July 1, 2015 and, therefore, corporate year-ends which straddle this date will be subject to a pro-rated tax rate. The new Alberta corporate tax rates applicable to an Alberta corporation with a December 31 year-end are 11.01% in 2015 and 12.00% for 2016 and subsequent years.
Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.
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