Canada: Tax measures in 2021 budget enacted (Prince Edward Island)

Bill 37, which received Royal Assent, includes the tax measures as introduced in the province's 2021 budget.

Tax measures in Prince Edward Island's 2021 budget enacted

Prince Edward Island's budget implementation bill (Bill 37) received Royal Assent on 17 November 2021.

Bill 37 includes the tax measures as introduced in the province's 2021 budget, including:

  • A reduction of the small business corporate income tax rate to 1% (from 2%) effective 1 January 2022
  • A consequential decrease to the non-eligible dividend tax credit
  • An increase to the basic personal income tax exemption amount to $11,250* (from $10,500)
  • An increase to the low-income threshold to $20,000 (from $19,000)
  • A reduction of the provincial non-eligible dividend tax credit to 1.30% (from 1.96%)

As a result, the combined top marginal rate on non-eligible dividends for Prince Edward Island residents in 2022 is set to increase to 47.04% (from 46.22%).

The individual tax measures have an effective date of 1 January 2022.

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

*$=Canadian dollar

 

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