TABLE OF CONTENTS TABLE OF CONTENTS PERSONAL TAX How To Use the Tables... 1 Income Tax Table (2015) Quebec Residents... 2 Income Tax Table (2015) Provinces Other Than Quebec... 4 Federal Tax Rates... 6 Provincial/Territorial Tax Rates... 6 Marginal Income Tax Costs of Capital Gains and Dividends (2015)... 16 Value of Personal Tax Credits (2015)... 22 2015 Personal Tax Credits (Federal)... 23 2015 Personal Tax Credits (Quebec)... 29 Calculation of Federal Personal Tax... 32 Calculation of Federal Net Income... 34 Employment Income... 34 Business Income... 44 Rental Income... 46 Farm Income and Losses... 46 Depreciable Property Capital Cost Allowance... 46 Eligible Capital Property... 50 Capital Property Capital Gains and Losses... 50 Registered Pension Plan (RPP)... 51 Pooled Registered Pension Plan (PRPP)... 52 Deferred Profit Sharing Plan (DPSP)... 53 Registered Retirement Savings Plan (RRSP)... 53 Pension Adjustments (PA, PAR, PSPA)... 54 Contribution Limits for the Year... 55 Registered Retirement Income Fund (RRIF)... 55 Home Buyers Plan (HBP)... 57 Lifelong Learning Plan (LLP)... 58 Registered Education Savings Plan (RESP)... 58 Registered Disability Savings Plan (RDSP)... 59 Tax-Free Savings Account (TFSA)... 59 i
Tax Reference Booklet Eligible Funeral Arrangement (EFA)... 60 Transfers Between Registered Plans... 61 Moving Expenses... 62 Child Care Expenses... 62 Repayment of Social Transfers... 64 Support Payments... 64 Scholarships, Bursaries, and Fellowships... 65 Restrictive Covenant... 65 Income Splitting and Attribution Rules... 65 Calculation of Federal Taxable Income... 68 Losses Carried Over and Adjustment to Net Capital Losses... 68 Capital Gains Exemption and CNIL... 69 Foreign Tax Deduction... 70 Other Deductions... 71 Calculation of Federal Tax... 71 General Presentation... 71 Refundable Tax Credits... 72 Non-Refundable Tax Credits... 72 Minimum Tax... 76 Tax Instalments Individuals... 76 Computation of Quebec Tax... 77 General Presentation... 77 Net Income... 78 Calculation of Taxable Income... 80 Non-Refundable Tax Credits... 80 Refundable Tax Credits... 82 Contributions to the Health Services Fund... 89 Premium Payable Under the Quebec Prescription Drug Insurance Plan... 90 Health Contribution... 90 Minimum Tax Quebec... 90 Tax Instalments Quebec... 91 Trusts... 91 CORPORATE TAX Federal Corporate Income Tax Rates... 93 ii
Table of Contents Provincial Corporate Income Tax Rates... 94 Income Qualifying for the SBD Only... 94 Income Qualifying for M&P Only... 95 Other Income... 95 Combined Corporate Income Tax Rates... 96 Calculation of Corporate Income Tax... 102 Tax Rates... 102 Refundable Dividend Tax on Hand, Part IV Tax, and Dividend Refund... 102 Capital Tax... 103 Federal... 103 Provincial... 103 Federal Investment Tax Credit... 103 Qualified Property... 103 Scientific Research & Experimental Development (SR&ED)... 103 Apprenticeship and Training... 104 Child Care Space... 104 Carryover... 104 Refundable Research and Development Tax Credit (R&D) Quebec... 104 Section 85 Tax-Free Rollover... 105 SOCIAL PROGRAMS Employment Insurance... 109 General Employment Insurance Rate... 109 Quebec Employment Insurance Rate... 109 The Small Business Job Credit... 109 Three-Year Freeze of Employment Insurance Premium Rates... 110 Employment Insurance Benefits... 111 Employment Insurance Benefits Repayment... 111 Canada Pension Plan and Quebec Pension Plan Contributions... 112 Canada Pension Plan (CPP) Contributions... 112 Quebec Pension Plan (QPP) Contributions... 113 Quebec Pension Plan Benefits... 115 Canada Pension Plan Benefits... 116 TABLE OF CONTENTS iii
Tax Reference Booklet Old Age Security Benefits (2015)... 117 OAS Basic Pension... 117 Guaranteed Income Supplement (GIS)... 117 Canada Child and Family Tax Benefits... 119 Goods and Services Tax Credit... 119 Canada Child Tax Benefit... 120 Child Disability Benefit... 120 Universal Child Care Benefit... 121 Vacation Pay... 123 Maternity/Parental Leave... 125 Drug Insurance Plan... 129 Quebec... 129 Ontario... 129 MISCELLANEOUS 2015 Budget Highlights... 131 Federal Budget... 131 Alberta... 133 British Columbia... 133 Manitoba... 134 New Brunswick... 135 Newfoundland and Labrador... 135 Northwest Territories... 135 Nova Scotia... 135 Nunavut... 136 Ontario... 136 Prince Edward Island... 137 Quebec... 137 Saskatchewan... 139 Yukon... 139 Remittances... 140 Instalments... 141 Major Tax Penalties and Offences... 142 Retention Period of Books... 144 Deadlines... 144 Payment of Balances Owing... 145 iv
Table of Contents Prescribed Interest Rates... 145 Average Exchange Rates for 2014... 146 Government Websites... 146 TRUST TAX Overview... 147 2014 Budget Amendments Re Testamentary Trusts... 147 Inter Vivos and Testamentary Trusts... 147 Graduated Rate Estates... 147 Taxation Years... 148 Due Date for Returns... 148 Personal Trusts... 148 Residence of Trusts... 148 Taxation Rules... 149 Net Income... 149 Capital Gains... 149 Taxable Dividends to be Received By Beneficiary... 149 Federal Tax Rates... 150 Testamentary Trusts Post-2015 Planning... 150 Non-Refundable Credits... 150 Minimum Tax... 151 Twenty-One-Year Deemed Disposition Rule... 152 Disabled Beneficiaries... 152 Clearance Certificates Form TX19... 153 Instalments... 153 Carrying Back Losses To The Final T1 Return... 153 Part XIII Non-Resident Tax... 153 Alter Ego, Spousal, And Joint Partner Trusts 2014 Budget... 154 SALES TAX Part XII.2 Tax On Designated Income... 154 Non-Resident Trusts... 154 Federal and Provincial Sales Tax Rates (2015)... 157 GST/HST and QST... 158 Introduction... 158 Registration... 158 GST/HST and QST Reporting Periods... 159 TABLE OF CONTENTS v
Tax Reference Booklet Examples of Exempt and Zero-Rated Supplies... 159 Quick Method for Small Businesses... 160 Simplified Method for Calculating ITCs/ITRs... 161 ITC/ITR Restrictions for Large Businesses... 161 Rebates to Public Service Bodies... 162 Federal and Provincial PSB Rebates Effective January 1, 2015... 162 New Housing Rebate... 163 Refund for New Rental Housing... 164 Tax Remittance Re Employment Benefits... 164 Employee Reimbursements and Allowances... 165 Provincial Place of Supply... 167 2016 DATES TO REMEMBER... 169 vi