Canada’s New Tax Laws: Changes To The Taxation of Private Corporations
Canada’s New Tax Laws: Changes To The Taxation of Private Corporations This blog has been brought to you by LawyerSelect.ca This past July, the federal Liberal government proposed some major changes to the taxation of private corporations. These proposals, if enacted by Parliament, are likely to affect the majority of Canadian business owners who carry on business through a private corporation. Income Splitting – It’s become very commonplace in Canadian tax planning for owners of private corporations to include their family members as part-owners . The basic structure is: family members hold shares in the corporation, either directly or through a family trust. Typically, family members hold different classes of shares, which basically allows for a dividend to be paid to the different family members at the sole discretion of the corporation’s directors or other officers. Structuring in such a way allows for dividends to be paid to family members who are in a lower ta...