New 2014 Non-Eligible Dividend Tax Rate
• What are non-eligible dividends?
 Payments made from a Canadian controlled private
corporation from its profits (under $500,000) to a
shareholder
Combined 2014 Federal & Provincial Tax Rate
for Non-Eligible Dividends (including surtax)
2014 Taxable Income
2014 Tax Rate for Non-eligible Dividends
first $ 40,120
5.35%
over $40,120 up to $43,953
10.19%%
over $43,953 up to $70,651
18.45%
over $70,651 up to $80,242
20.61%
over $80,242 up to $83,237
23.45%
over $83,237 up to $87,907
28.19%
over $87,907 up to $136,270
32.91%
Over $136,270 up to $150,000
36.45%
Over $150,000 up to $220,000
38.29%
Over $220,000
40.13%
2014 – Combined Federal and Provincial Tax
Brackets and Rates (Ontario)
2014 Taxable Income
Ordinary Source of Income (excluding non-eligible
dividends)
first $40,120
20.05%
over $40,120 up to $43,953
24.15%
over $43,953 up to $70,651
31.15%
over $70,651 up to $80,242
32.98%
over $80,242 up to $83,237
35.39%
over $83,237 up to $87,907
39.41%
over $87,907 up to $136,270
43.41%
over $136,270 up to $150,000
46.41%
over $150,000 up to $220,000
47.97%
over $220,000
49.53%
Fintrac – New Canadian Anti-Money
Laundering Regulations (AML)
• New regulations as part of
Canada’s Proceeds of Crime
(Money Laundering) and
Terrorist Financing Act
 Aimed to combat the laundering
of proceeds of crime and
combat the financing of terrorist
activities
Who are most affected?
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Most applicable industries and sectors:
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Money service businesses
Financial services organizations
Life insurance companies and life insurance brokers or
agents
Securities dealers
Legal counsel and legal firms
Accountants and accounting firms
Real estate brokers or sales representatives
Dealers in precious metals and stones
Real estate developers
Casinos
Departments and agents of her majesty in right of Canada
or of a province
What does it mean for you?
• New regulations reinforced concept of
‘business relationship’
• You automatically establish a business
relationship with a client when they open an
account with your entity where you conduct
financial transactions or provide services
related to those transactions.
Continued…
• Responsibilities
 Required to document the nature and engagement
of the business relationship from the onset
 Perform prior due diligence on the client (ethical
issues, criminal history, compliance issues)
 Obtain knowledge on the client’s business (owners,
branches, executives)
 Perform ongoing yearly monitoring for any major
changes
Monitoring & Reporting
• If you detect suspicious activity, you are
required to report this to FINTRAC
 You can do this electronically at http://www.fintraccanafe.gc.ca/reporting-declaration/1-eng.asp
New 2014 Personal Tax Credits
• Changes to lifetime capital gains exemption
 For 2014, the limit has been increased from
$750,000 to $800,000. Future increases will be
indexed to inflation.
Adoption Expense Tax Credit
Adoption Expense Tax Credit
• Nonrefundable tax credit equal to 15%
of the adoption expenses incurred for
adopting a child below 18.
• Adoption period has been changed to
include earlier adoption related
expenses
Hiring Credit for Small Business
•
Business owners are eligible for this credit if they meet
all of the following conditions.
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deducted EI premiums from the compensation they
paid to their employees, or they paid the worker's share
of EI premiums for barbers, hairdressers, fishers, or
drivers of taxis and other passenger-carrying vehicles
and they paid these premiums (along with your share of
EI premiums) to their payroll program (RP) account;
They reported the income and deductions on a T4 slip
and filed this information on their RP account for 2012
and 2013
The total of employer EI premiums they paid for 2012
was $15,000 or less
Their total employer EI premiums increased in 2013.
First-time Donor’s Super Credit
New credit for first-time donors. It is on
top of the existing donations credit, and
increases the donations tax credit by 25%
for the first $1000.
Once the 25% increase is factored, donors
will receive a whopping 40% tax credit for
the first $200 of donations and 54% on
donations made from $200 to $1,000.
Ontario Retirement Pension Plan
• Meant to supplement the CPP and provide
additional retirement income
How will it work?
• Workers would kick in 1.9 percent of their
annual income up to $90,000 a year; a
contribution employers would match. The
threshold will increase each year, consistent
with the CPP maximum earnings threshold.
Is it Mandatory?
• The program would be
mandatory except for the
self-employed, those already
enrolled in workplace
pension plans, and those in
federally regulated
industries, such as banking.
Am I exempt? What does it
mean if I’m not?
• Government has stated employers with a
"comparable workplace pension plan"
will be exempt from participating in the
ORPP. However, they have not defined
what "comparable" means. Employers
who aren't exempt will certainly have
increased payroll costs.
• Mandatory participation is set to start in
2017
Capital Cost Allowance (CCA)
• 50% straight line depreciation rate will be
extended for two years to include investment
in eligible manufacturing or processing
machinery and equipment in 2014 and 2015.
• Faster write-off of eligible investments means
businesses in the manufacturing and
processing sector will be able to retool with
new machinery and equipment to remain
competitive in the current global environment.
2014 CCA Rates
Type
Rate
Buildings acquired since 1988, including component parts
Residential
4%
Buildings acquired on or after March 19, 20072 and used
90%+ for Manufacturing and processing (separate class)
10%3
Buildings acquired on or after March 19, 20072 and used
90%+ for non-residential purposes (separate class)
Commercial
6%3
Fences, greenhouses, wood buildings (farming and fishing)
10%
Assets not included in any other class such as accessories,
equipment, furniture, photocopiers, telephones, tools
costing more than $500 and outdoor advertising panels
20%
Automobiles, panel trucks, trucks, tractors, trailers
30%
Type
Passenger vehicles, the cost of which is equal to
or exceeds prescribed amounts ($30,000 + tax
since 2001 – see Section 5)
Rate
30%
Application software, small tools, cutlery,
linen, uniforms, moulds, medical instruments costing
less than $500 and rented videotapes
100%
Leasehold improvements
Lease term4
Taxis, automobiles acquired for short-term leasing and
coin-operated video games
40%
Trucks and tractors designed for hauling freight
40%5
Parking areas or similar surface construction
8%
Manufacturing or processing equipment
acquired before March 19, 2007 and after 2015
30%
Manufacturing or processing equipment acquired
on or after March 19, 2007 and before 2016
50% Straight-line
Computer equipment, systems software and
related equipment acquired after March 18, 2007 and
before January 28, 2009 and after January 2011
55%
Data network infrastructure equipment acquired
after March 22, 2004
30%
CCA for Green Energy
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What is it? Income tax system encourages businesses to invest in clean energy generation and
energy efficiency equipment by providing an increased rate. How do I qualify? For equipment to
qualify, it must be situated in Canada. Green energy equipment includes a variety of stationary
equipment that generates energy by using renewable energy sources. Examples of systems that
qualify under Class 43.1 are
Systems that generate electricity and reusable heat under 6,000 BTU per kilowatt-hour
Electrical generating equipment including
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Control, conditioning and battery storage equipment, transmission equipment, and fixed location
photovoltaic equipment
Heat production and recovery equipment
Fossil fuel equipment
Energy systems that produce power from sunlight
Wind energy systems (i.e., wind-driven turbines, electrical generating equipment
Heat exchangers, compressors and boilers
Class 43.1 provides a 30% accelerated capital cost allowance rate