Proposed changes to the tax structure may have negative implications on farmers.
Finance Minister, Bill Morneau, announced plans last Tuesday to stop higher income earners – such as doctors and lawyers, from “income sprinkling”.
The federal government wants to target high- income Canadians who use their private corporations and family members to reduce taxes.
Accountant and partner of Muth & Co LLP, Steven Muth, says this change will effect more than just whom their targeting.
“Many agricultural producers have family working on the farm. That’s the only way farming is sustainable, you have the family work, and for taxation purposes you pay them an income. If the CRA brings in these changes in a broad sense, and does not allow for rational thinking and feedback, it’s just one more level of burden upon the average business owner.”
The proposed changes would prevent business owners from using their private corporations as a way to shift their income to family members; even if they are not involved in the business.