The new tax rules related to the passive income grind of the small business deduction ("SBD") apply to corporations with a taxation year that begins on or after January 1, 2019. Under the new rules, passive investment income earned by a Canadian controlled private corporation ("CCPC") can have a negative impact on the corporation's ability to claim the SBD.
A TFSA is a type of account granted in Canada, which allows investment income to be earned and withdrawals to be made by an individual without any tax consequences. For example, any interest or dividends earned on funds within a TFSA can be withdrawn on a tax-free basis. This type of account encourages and helps individuals save money for the future.