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Canada: Tax measures in Prince Edward Island’s 2020 budget enacted

Canada: Tax measures in Prince Edward Island’s budget

Several tax measures included in Prince Edward Island's 2020 budget have been enacted.


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Bill 58 received third reading and Royal Assent on 14 July 2020. As a result, the following tax measures were enacted:

  • The provincial small business corporate income tax rate is reduced to 2% (from 3%) effective 1 January 2021. The tax rate reduction will be prorated for tax years straddling 1 January 2021.
  • The non-eligible dividend tax credit rate is reduced to 1.96% (from 2.74%), effective 1 January 2021. There are 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 increase in the province's basic individual (personal) income tax amount to $10,500* (from $10,000) is effective 1 January 2021.
  • A new $500 non-refundable children's wellness tax credit is effective 1 January 2021.
  • An increase in the province's low income threshold to $19,000 (from $18,000) is effective 1 January 2021.

Read a July 2020 report prepared by the KPMG member firm in Canada

*$=Canadian dollar

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