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Agriculture and the Forest Industry: Tax Changes to Watch For

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Do you own a farming or forestry business? Here are some changes to consider when preparing your next income tax returns.

Corporate tax rates:


The rate is 10% for 2018 and will drop to 9% on January 1, 2019 on net business income under $500,000.


In Quebec, the tax rate for corporations in the primary sector is 4% of net business income under $500,000 since January 1, 2017.

Contribution rate to the Health Services Fund:

Since August 16, 2018, the rate is 1.25% for businesses in the primary sector.

Eligible capital property:

Since January 1, 2017, there are new rules for eligible capital property (e.g. dairy and poultry quotas as well as maple syrup quotas).

The total amount of the value of your eligible capital property will become the opening balance of the new Class 14.1.

Expenses incurred before 2017 can still be depreciated using the declining balance method at a rate of 7%. Expenses after 2017 are added in full in Class 14.1 and depreciated using the declining balance method at a rate of 5%. The half-rate rule applies to expenses after 2017.

If you plan on selling part of your quota, it is very important to consult your tax specialist to plan for all consequences.

If you create a new business, the first $3,000 of incorporation fees is now a deductible current expense.


The threshold for the tax on forestry operations is now $65,000 (formerly $10,000).

Certain criteria apply to these changes. To ensure having a consistent tax return that takes into account all of the aspects specific to your business, get the most out of our experts’ services.

This article was drafted in October 2018. The tax rules change regularly. In case of doubt, don’t hesitate to contact an expert.

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