The Federal Government implements a new dividend tax regime. What are the implications for dividend income?
Effective January 1, 2006, the Federal Government implemented a new dividend tax regime for dividends paid by Canadian corporations to their shareholders. The result of these changes is that the top federal personal income tax rate on eligible dividends received by individuals (investors) decreased by 5% in 2006. Certain provinces have mirrored the new federal regulations concerning such dividends. Eligible dividends generally include dividends paid after 2005 by Canadian public corporations out of income subject to the general corporate income tax rate. For year 2006, all common and preferred share dividends paid by Laurentian Bank of Canada are considered as eligible dividends. For year 2007, the designation of dividends as eligible or non-eligible will be done at each dividends declaration date. Please contact a tax advisor for help or for further information on this subject. To learn more about the dividends paid, please visit the Dividends section.
