Income Tax Act subsection 125
The small business deduction is available on active business income for a Canadian Controlled Private Corporation. It provides a reduction in the corporate tax rate up to the federal limit of $500,000.
What the above means is if you are earning active business income as a CCPC then your first $500,000 of net income is taxed at a reduced rate. This makes it easier to amass funds in a corporation and is a large reason many Canadians incorporate their businesses.
|Description||Income Tax Act||2016||2017||2018||2019|
|Part I Tax||
|Federal Tax Reduction||
|Small Business Deduction||
IT-73R6 Small Business Deduction