Canada: “Small business” income tax rate decrease (Northwest Territories)

Canada: “Small business” income tax rate decrease

Bill 16—that includes a provision to reduce the “small business” income tax rate in the Northwest Territories to 2% (from 4%)—received third reading on 12 March 2021.

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The reduction in the small business income tax rate has an effective date of 1 January 2021.

There are also two provisions concerning individual (personal) income tax to harmonize the Northwest Territories tax regime with that of the Canadian federal system:

  • “Split income” received by a senior citizen is factored into the determination of the territorial age credit (effective 1 January 2018).
  • There is additional pension credit for veterans (effective 1 January 2015).

Read a March 2021 report prepared by the KPMG member firm in Canada

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