Several tax measures announced in Prince Edward Island's 2020 budget are now enacted
Prince Edward Island's Bill 58 received third reading and Royal Assent on July 14, 2020. As a result, the provincial small business corporate income tax rate is reduced to 2% (from 3%) effective January 1, 2021, and several other tax measures announced in Prince Edward Island's 2020 budget are now enacted. The bill also includes measures to reduce the non-eligible dividend tax credit to preserve integration in 2021, due to the decrease to the small business income tax rate.
The reduction to the small business corporate income tax rate is considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on July 14, 2020, the date the bill received third reading, as Prince Edward Island has a minority government. The reduction is also considered enacted for U.S. GAAP purposes on July 14, 2020, the date the bill received Royal Assent.
Corporate tax measures
Prince Edward Island's small business tax rate reduction is effective January 1, 2021. The tax rate reduction will be prorated for taxation years straddling January 1, 2021.
Other tax measures
Bill 58 also includes the following personal tax measures that were announced in Prince Edward Island's 2020 budget, which:
Bill 58 also decreases the non-eligible dividend tax credit rate to 1.96% (from 2.74%), effective January 1, 2021.
For more information, please contact your KPMG advisor.
Information is current to July 21, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
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