Ontario 2015 Budget Tabled
Ontario’s 2015 Budget, delivered on April 23, overhauled a number of the province’s tax credits and set out plans for a further crackdown on tax avoidance.
The Budget made numerous changes to creative tax breaks, effective from April 23, 2015. The Ontario Production Services Tax Credit was reduced from 25 percent to 21.5 percent for qualifying production expenditures. Salaries and wages paid to Ontario-based individuals for services provided in the province now have to amount to at least 25 percent of total expenditures.
The Ontario Computer Animation and Special Effects Tax Credit was cut from 20 to 18 percent. The Ontario Film and Television Tax Credit was amended to treat a government equity investment in a production in the same manner as other forms of assistance. The Ontario Interactive Digital Media Tax Credit was refocused toward entertainment products and educational products for children under the age of 12.
Changes were also made to the Apprenticeship Training Tax Credit, effective for eligible expenditures related to apprentices who commenced an apprenticeship program after April 23, 2015. The general tax credit rate was cut from 35 percent to 25 percent, and the rate for small businesses with salaries or wages under CAD400,000 (USD330,685) from 45 percent to 30 percent. The annual maximum per apprentice was decreased from CAD10,000 to CAD5,000, and the eligibility period was reduced from the first 48 months of an apprenticeship program to the first 36. In addition, the Ontario Resource Tax Credit and Additional Tax on Crown Royalties was abolished and replaced by a deduction for royalties and mining taxes paid, effective April 23, 2015.
The Budget contained measures to tackle tax avoidance. The Government has proposed making illegal the use, manufacture, or distribution of electronic sales suppression technologies. So-called “zappers” enable the concealment of sales records, including the taxes paid by customers. The Government will also examine options for stopping sales suppression via point-of-sale terminals.
Last, the Government will tackle non-compliance among public sector contractors and introduce new measures to tackle the contraband tobacco trade.
