Plain meaning
Income from a business carried on by a corporation, excluding certain investment or specified income depending on the rules.
Also called
ABI
Key points
- Active business income generally means income from carrying on a business, excluding specified investment income.
- For a CCPC, active business income may qualify for the small business deduction up to the applicable business limit.
- Certain income from related corporations or property can require closer classification analysis.
- The distinction between active and passive income affects corporate tax rates and refundable tax mechanisms.
Why it comes up
Active business income classification affects small-business tax rates, corporate planning, and budget measures aimed at businesses.