Tax Changes That Might Affect You
Who doesn’t love a good business write-off? Did you purchase new assets after November 20, 2018?
In the November 21, 2018 Fall Economic Statement, the federal government proposed three important and immediate changes to Canada’s tax system and what you can write-off. In order to enhance business confidence in Canada and stay competitive with the United States:
- The immediate write-off for tax purposes of the cost of machinery and equipment used for the manufacturing or processing of goods (Class 53).
- There is an immediate write-off of the full cost of specified clean energy equipment (Class 43.1 and 43.2).
- An accelerated capital cost allowance (i.e., larger deduction for depreciation) for all capital property other than manufacturing & processing and clean energy equipment. The Accelerated Investment Incentive will provide a deduction in the first year equal to 3 times the amount that would otherwise apply. It is subject to a maximum write-off of 100% of the cost.
“Part of what contributed to widespread concern about Canada’s competitive position was efforts in the U.S. to lower the overall tax rate on new business investment. Those measures were ultimately very costly. The federal government’s actions today are an attempt to both respond to those immediate pressures, while not completely ignoring their fiscal situation.” said by Francis Fong, CPA Canada’s chief economist.
Talk to your accountant about new investments your considering to see if these changes apply to you.
For more information contact us or call 250-744-3854.