Canada: Changes to tax rates on dividends, high-income individuals (Newfoundland and Labrador)

Legislation also includes the budget measure for the introduction of a new “physical activity tax credit.”

Legislation also includes the introduction of a new “physical activity tax credit.”

Newfoundland and Labrador Bill 15—that includes amendments to the province’s eligible and non-eligible dividend tax credits that are scheduled to be effective 1 January 2022—received first and second reading on 16 June 2021.

These measures—not previously announced in the province’s 2021 budget—would:

  • Effectively decrease the tax rate on certain eligible dividends by increasing the dividend tax credit to 6.3% (from 5.4%)
  • Effectively increase the tax rate on non-eligible dividends by decreasing the credit to 3.2% (from 3.5%)

The bill also includes the budget measure for the introduction of a new “physical activity tax credit,” also effective 1 January 2021.

Newfoundland and Labrador Bill 14—that includes measures to increase the individual (personal) income tax rates for certain high-income earning individuals—received first, second and third reading on 16 June 2021. The bill introduces three new tax brackets for individuals earning over $250,000* (as originally announced in the 2021 budget and scheduled to be effective 1 January 2022).
 

Read a June 2021 report [PDF 265 KB] prepared by the KPMG member firm in Canada

*$ = Canadian dollar

 

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