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Canada

1 February 2014

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Budget for 2014 – business income taxation

The Budget for 2014 was tabled by the Minister of Finance on 11 February 2014. Details of the Budget relating to business income taxation, which unless otherwise indicated will apply from 1 January 2014, are summarized below.

- Remittance thresholds for employer source deductions. In order to reduce the compliance burden, Budget 2014 proposes to reduce the frequency of remittance of source deductions for certain employers by increasing the thresholds that apply in determining whether employers remit up to four times per month, up to two times per month or once per month.
- Tax incentives for clean energy generation. Budget 2014 proposes to expand Class 43.2 (which provides for an accelerated CCA rate of 50 per cent per year on a declining-balance basis) for investment in specified clean energy generation and energy conservation equipment to include water-current energy equipment and equipment used to gasify eligible waste fuel for use in a broader range of applications.
- Consultation on eligible capital property. The eligible capital property (ECP) regime governs the tax treatment of certain expenditures of a capital nature (eligible capital expenditures) and receipts (eligible capital receipts) that are not otherwise accounted for as business revenues or expenses, or under the rules relating to capital property. An eligible capital expenditure is generally a capital expenditure incurred to acquire rights or benefits of an intangible nature for the purpose of earning income from a business, other than an expenditure that is deductible as a current expense or that is incurred to acquire an intangible property that is depreciable under the capital cost allowance (CCA) rules. Budget 2014 announces a public consultation on a proposal to repeal the ECP regime, replace it with a new CCA class available to businesses.

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