ALBERTA BUDGET HIGHLIGHTS

Transcription

1 Alberta Budget Announcement October 27, 2015

2 ALBERTA BUDGET HIGHLIGHTS On October 27, 2015, Alberta Finance Minister Joe Ceci delivered the province s 2015 Budget, projecting a $6.1 billion deficit. While the budget maintained many of the tax measures previously introduced this year, it does contain several new tax measures which are highlighted below. Personal Income Tax Measures Income Tax Brackets The changes proposed in Alberta s June 2015 announcements remain in place; therefore, personal income tax rates will be as follows: Taxable Income and later $0 to $125, % 10.0% $125,001 to $150, % 12.0% $150,001 to $200, % 13.0% $200,001 to $300, % 14.0% $300,001 and over 11.25% 15.0% Alberta Family Refundable Tax Credits Starting July 1, 2016, the Alberta Family Employment Tax Credit (AFETC) will be enhanced, with more families receiving the benefit and many families receiving more benefit. The rate at which benefits are phased in will be increased from 8% to 11% and the phase out threshold will increase from $36,778 to $41,250. The new Alberta Child Benefit (ACB) program will begin in July, 2016, providing families with an annual benefit of up to $1,100 for one child, and up to $550 for each additional three children. Families with net income of up to $25,500 will receive the maximum benefit; the benefit will be fully phased out when family income reaches $41,220. Albertans must file a provincial return to be eligible. Dividend Tax Credit The federal government has made changes to the factors used in the calculation of its dividend tax credit for non-eligible dividends. As Alberta relies on the same factors for its own non-eligible dividend tax credit, it has been announced that amendments will be introduced in the fall of 2015 to account for these changes. Alberta s dividend tax credit on eligible dividends is also being reviewed and results will be announced in the budget of Indexing Alberta s personal income tax system is indexed to inflation; in 2015, credit amounts increased by 2.4%. This increase results in the basic personal, spousal and eligible dependent amounts rising from $17,787 to $18,214.

3 Corporate Income Tax Measures Corporate Income Tax Rates No changes to corporate income tax rates have been announced since Bill 2 was passed by the Legislature in June This legislation increased the general corporate income tax rate from 10% to 12% effective July 1, 2015 (prorated for the calendar year, the rate will be 11% for 2015 and 12% for 2016 and later). The small business tax rate remains unchanged at 3% (for active business income up to the small business limit of $500,000). Job Creation Incentive Program A new Job Creation Incentive program has been introduced to provide grants to employers for net new employment created after January 1, Grants will be worth up to $5,000 for each new job; eligible employers may receive maximum support of $500,000 (the equivalent of 100 new full-time jobs). Program funding will be capped at $89 million per calendar year and grants will be made available on a first-come, first-served basis. Other Tax Measures Tobacco Tax Tobacco taxes will increase effective 12:01am on October 28, 2015: $5 (to $50) per carton of cigarettes; 3.75 cents (to 37.5 cents) per gram for loose tobacco 129% of the taxable price of a cigar (minimum tax per cigar of $0.25 and maximum of $7.83) Insurance Premiums Tax The insurance premium tax will increase 1% to 3% on premiums for life, accidental and sickness insurance, and to 4% for other insurance, effective April 1, Locomotive Fuel Tax The tax on locomotive fuel will increase 4 cents to 5.5 cents per litre, effective November 1, ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world.

4 Please contact your Business Advisor or one of our Alberta Region Tax Leaders CALGARY Randy Bella EDMONTON Mark Bernard GRANDE PRAIRIE & PEACE REGION Kim Drever RED DEER Graham Heron LETHBRIDGE Michael Unick MEDICINE HAT Deidre Jensen

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