Income sharing changes go into effect in three weeks with no detail for small business owners
TORONTO, Dec. 10, 2017 /CNW/ - As Canada's finance ministers begin their meeting in Ottawa, the Canadian Federation of Independent Business (CFIB) is asking them to join its call for the federal government to delay its new income sprinkling rules set to go into effect on January 1, 2018.
"One of the largest tax changes for small business owners in 40 years goes into effect in three weeks and the federal government has provided zero detail or implementation advice to business owners or tax professionals," said Dan Kelly, CFIB president.
"The new rules to the way small business owners share income with family members may require changes to existing business structures and there will be no time to make any of this happen before year end. Even if government releases the detail today, it will land at one of the busiest times of the year for thousands of firms in the retail and service sector."
In October, CFIB welcomed several of the government's adjustments to its suite of proposed tax changes, including a new commitment to release the draft legislative proposals for income sprinkling "later this fall".
"After positive signs that government was starting to listen to the concerns of small business owners, moving ahead at this stage with changes that have not been legislated, studied or even shared would amount to another broken promise to Canada's entrepreneurs," Kelly added.
In a letter in advance of today's meeting of federal and provincial finance ministers, CFIB is calling on all provinces to urge the federal government to delay the implementation of any changes to income sprinkling rules to January 1, 2019.
CFIB remains concerned that the new rules on income sprinkling won't take into account many of the formal and informal ways family members participate in the business, particularly the role of spouses. Business owners are worried that they could see their red tape burden increase significantly in order to prove that their family members make a "meaningful contribution" to the family enterprise.
"The government has used the term 'tax fairness' when speaking of the tax proposals," Kelly said. "But leaving businesses in the dark about changes that are just weeks away, is anything but fair."
CFIB is Canada's largest association of small and medium-sized businesses with 109,000 members across every sector and region. Learn more at cfib.ca.
SOURCE Canadian Federation of Independent Business (Toronto)
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