The once unlimited favorable stock option deduction will be limited for eligible grants made on or after July 1, 2021. Generally, if certain conditions are met, employees enjoy a 50% deduction on the taxable income at exercise; however, as of next July the stock options eligible for such tax favorable treatment will be limited to C$200,000 annual grant value. The new rules apply to companies that are not Canadian-controlled private corporations with annual gross revenue of more then C$500 million.

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