What's new for small businesses and self-employed

On this page, you will find information on the following:

• Small business job credit
• Accelerated capital cost allowance
• Eligible capital property
• Expanding tax support for clean energy
• Submit additional documents online

Small Business Job Credit

You may be eligible for a refund of employment insurance premiums paid for 2015 and 2016 under the new Small Business Job Credit. For further details on the Small Business Job Credit, visit the Finance Canada website.

Accelerated capital cost allowance

Budget 2015 provides an accelerated capital cost allowance (CCA) rate of 50% on a declining-balance basis for eligible machinery and equipment acquired by a taxpayer after 2015 and before 2026 for use in Canada primarily for the manufacturing and processing of goods for sale or lease. These assets will be included in the new CCA Class 53.
The “half-year-rule”, which allows half the CCA deduction otherwise available in the taxation year in which an asset is first available for use by a taxpayer, will apply to machinery and equipment eligible for this measure. These assets will be considered “qualified property” for the purpose of the Atlantic Investment Tax Credit.

Eligible capital property

On January 1, 2017 the budget proposes to cancel the eligible capital property system. It will be replaced with a new capital cost allowance (CCA) class 14.1 with transitional rules. Under the old system, eligible capital expenditures are added to the cumulative eligible capital pool at a 75% inclusion rate, and the rate of depreciation of those expenditures is 7% on a declining-balance basis. Under the new system, newly-acquired eligible properties will be included in class 14.1 at a 100% inclusion rate with a 5% capital cost allowance rate on a declining-balance basis.
For each taxation year that ends before 2027, additional deductions for CCA will be allowed for property included in class 14.1 that was eligible capital property acquired before January 1, 2017. Also, a separate business deduction will be provided for incorporation expenses made after 2016. The first $3,000 of incorporation expenses will be treated as a current expense rather than being added to class 14.1.

Expanding tax support for clean energy

Capital cost allowance class 43.1 and 43.2

The March 22, 2016 federal budget proposes to allow accelerated capital cost allowance (CCA) for electric vehicle charging stations that meet certain power thresholds. This is for property acquired for use after March 21, 2016 that has not been used or acquired for use before March 22, 2016. The budget proposes to expand the range of electrical energy storage property that is eligible for accelerated CCA.
Electrical vehicle charging stations (EVCSs) set up to supply more than 10 kilowatts, but less than 90 kilowatts of continuous power, will be included in class 43.1 at capital cost allowance rate of 30%.
Electrical vehicle charging stations (EVCSs) set up to supply 90 kilowatts and more of continuous power will be included in class 43.2 at capital cost allowance rate of 50%.

Submit additional documents online

Do you need to send supporting documents to the CRA after you file your income tax and benefit return? You can now submit documents online through one of the following secure online service portals:

• My Business Account, if you are a business owner; or
• Represent a Client, if you are an authorized representative or employee.

Date modified:

2017-01-04