Choosing not to claim the small business deduction (even though you are entitled)? Significant tax costs could arise.

In a February 2, 2017 French Technical Interpretation (2016-0674221C6, Labarre, Sylvie), CRA opined that the general rate reduction (Subsection 123.4(1)) will not be available in cases where a corporation chooses not to claim the SBD, even though they have the right to claim such an amount. The general rate reduction provides a 13% tax rate reduction on full-rate taxable income.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 429