Tax Planning for CCPC’s from the Experienced Chartered Professional Accountants at Mew + Company
For more, go to: https://www.mewco.ca/blog/vancouver-tax-planning-for-ccpcs-as-we-approach-the-second-half-of-2018/.
First, the corporate tax rate on income subject to SBD has been lowered to 12% in BC. This is great for young entrepreneurs who are starting out with little retained earnings. This means up to
The changes to the taxation of investment income earned by a CCPC's retained earnings will impact more mature businesses. Many CCPCs that have extra funds that are not required for expansion or capital investments will place those funds in an investment portfolio or real estate. The investment portfolio can hold stocks, foreign currencies, or any other asset class. Investment portfolios generate interest, dividends, and capital gains, while real estate will generally net rental income and capital gains.
Under the new rules, a CCPC can earn up to
The new rules pertaining to passive income will apply for taxation years that start after 2018. However, 2018 investment income will impact the grind down of SBD for the 2019 tax reporting year, so tax planning is called for during the 2018 taxation year.
The new 2018 rules to tax passive income have further burdened what was already a complex taxation system, involving higher tax rates and a refundable tax pool. Starting in 2019, tax advisors will have to deal with two refundable tax pools and perhaps a different remuneration method to the shareholder(s) to avoid the SBD grind. This is in conjunction with the end of dividend sprinkling after 2017 which will surely add to the tax planning work required during the fall of 2018.
To learn more about how changing tax laws will impact a business and savings, contact the charted professional accountants at
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