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Business Tax Update
- The small business limit is increased to $500,000 as of January 1, 2009.
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The limit of the taxable income phase-out range of the expenditure limit for the enhanced investment tax credit (ITC) rate of 35% on qualified Scientific Research and Experimental Development (SR&ED) expenditures increases accordingly to between $500,000 and $800,000. This change applies where the previous taxation year ends after 2008.
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For eligible new computers and system software used in Canada, acquired after January
27, 2009 and before February 2011, a CCA rate of 100% applies, with no half-year rule.
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In reaction to the Federal Court of Appeal decision in La Survivance, it is proposed that the deeming rule regarding the timing of an acquisition of control of a corporation not apply for purposes of determining if a corporation is a small business corporation or a Canadian-controlled private corporation. This amendment will apply in respect of acquisitions of control that occur after 2005, except if the taxpayer elects otherwise for acquisitions of control before January 28, 2009.
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