On December 10, 2019, Ontario’s Bill 138 received Royal Assent.
The small business corporate income tax rate has been reduced to 3.2% (from 3.5%), as announced in Ontario’s 2019 Fall Economic Update.
This brings the combined Federal and Ontario Small Business Corporate Tax Rate to 12.2% (from 12.5%), effective January 1, 2020.
This rate applies to the first $500,000 of qualifying active business income of a Canadian-controlled private corporation.
The bill also includes other measures that increase the non-eligible dividend tax rate for individuals.