1997 COMBINED FEDERAL AND NORTHWEST
TERRITORIES PERSONAL INCOME TAX RATES1
- The tax rates include the federal surtax (calculated on
the basis of only the basic personal credit for all
claimants) and reflect budget proposals to January 26,
1997,. Where the tax is determined under the minimum tax
provisions, the above table is not applicable.
- The tax determined by the table should be reduced by the
provincial tax value of all applicable tax credits (see
chart below) other than the basic personal tax credit,
which has been reflected in the calculations.
- The rates apply to the actual amount of taxable dividends
received by individuals from taxable Canadian
- The rates apply to the actual amount of the capital gain.
The capital gains exemption on qualified farm property
and small business corporation shares may apply to
eliminate the tax on those specific properties.
1997 FEDERAL PERSONAL TAX CREDITS AND RELATED
TAX VALUE1 IN NORTHWEST TERRITORIES
personal credit (see note 2 above)
(reduced by 17% of spouse's income over $538)
(reduced by 17% of dependent's income over $538
dependent aged 18 or over
(reduced by 17% of dependent's income over $4,103)
(65 or over)2
a percentage of:
|- first $200
- The tax value of each tax credit is the sum of the
federal tax credit, the related reduction in Northwest
Territories tax (45% of credit) and the reduction in
federal surtaxes as it would apply to taxpayers in the
highest tax bracket.
- The maximum age credit of $906 occurs at $25,921 of net
income and declines to nil as net income rises to
- The credit is computed as 17% of the amount by which
eligible medical expenses exceed the lesser of $1,614 and
3% of net income.
- All CPP paid by both employees and self-employed
individuals will give rise to a tax credit.
ALTERNATIVE MINIMUM TAX
Alternative minimum tax (AMT) may be applicable where the tax
otherwise payable is less than the tax determined by applying the
relevant AMT rate (26.01% including federal surtaxes) to the
individual's taxable income adjusted for certain preference
items. Additions to taxable income in determining adjusted
taxable income include most contributions to RRSPs and registered
pension plans, the non-taxable portion of capital gains, and
certain investment losses and related carrying charges.
Deductions in determining adjusted taxable income include the 25%
gross-up on Canadian dividends. All individuals are also entitled
to a basic AMT exemption of $40,000.
1997 TAX RATE CARD
CORPORATE INCOME TAX RATES1
AND PROCESSING INCOME
- The rates shown are the combined federal and provincial
rates for corporations with fiscal years commencing
January 1, 1997 and ending December 31, 1997 Different
rates will apply to corporations with non-calendar year
ends or short year ends. The rates reflect budget
proposals to May 15, 1997.
- The small business deduction (SBD) and related lower
provincial rates are applicable to the first $200,000 of
active business income of Canadian-controlled private
corporations (CCPCs) or associated groups of CCPCs. CCPCs
or associated groups with taxable capital in excess of
$10 million will have the benefit of the SBD reduced. The
benefit is eliminated at $15 million.
- There is an additional 6.67% refundable federal income
tax on investment income of CCPCs.
- The tax rate for new companies qualifying for the
applicable provincial tax exemption is equal to the net
federal rate. In Nova Scotia, a three-year New Small
Business Tax Reduction program exists for businesses
incorporated after April 24, 1992. In Quebec, a
three-year exemption from income, capital and payroll
taxes is available to new corporations incorporated after
March 25, 1997, carrying on an eligible business. In
Manitoba, a small business tax reduction applies for the
first five years for qualifying corporations incorporated
before 1993. In Newfoundland, a 10-year exemption from
income, payroll and retail sales taxes is available for
certain qualifying corporations. British Columbia has
introduced a two-year income tax exemption for new
eligible small businesses incorporated before March 21,
- The Quebec tax rate is 45.83% on non-active business
income for Quebec tax purposes.
- The Ontario tax rate is 1% lower on farming, fishing,
mining and logging income not eligible for the SBD.
- Ontario imposes a surtax on active business income
exceeding $200,000 where the corporation has benefitted
from the Ontario SBD. The Ontairo SBD benefit is
effectively eliminiated entirely at about $500,000 of
- The manufacturing and processing profits rate is reduced
by up to 7% by way of tax rebate.
CAPITAL AND PAYROLL TAXES
CAPITAL TAX RATE
||0 - 4.5%4
||0 - 1.956
- Tax reduced if taxable capital is less than $2,000,000.
- Tax reduced if taxable capital is less than $2,300,000.
- Tax reduced if taxable capital is less than $1,750,000.
- Tax is nil on first $750,000 of payroll; 4.5% on second
$750,000; 2.25% thereafter.
- Tax is nil on first $100,000 of payroll; 2.0% for payroll
- Tax is nil on first $200,000 of payroll; 1.95% for
payroll over $200,000.
- A payroll tax refund is $1,200 is available for each
full-time job (maximum 300 created as of January 1, 1997.
- Effective April 1, 1997. Tax is reduced is taxable
capital is less than $10,000,000.