ASSUMING YOU WANT TO WITHDRAW OPERATING PROFITS EARNED IN THE YEAR ...

WHICH IS BETT
This spreadsheet presumes all the Active Business Income qualifies for the Small Business Deduction

Earn Wage Personally or Distribute Corporate Profits as Wages or Dividends ?

No corporation

Pay Pay
Dividends Wages

Wage 1,000 Active Business Income 1,000 1,000

Wages paid (1,000)
Taxable Income 1,000 0

Corp Tax at SBD rate *** (122)

Cash Non-Eligible Dividend 878
there is a RDTOH balance th
Personal Tax Personal Tax ** on dividends on wages
Tax bracket 1 225 Tax bracket 1 90 225
Tax bracket 2 308 Tax bracket 2 174 308
Tax bracket 3 390 Tax bracket 3 257 390
Tax bracket 4 435 Tax bracket 4 302 435
Tax bracket 5 535 Tax bracket 5 419 535

After tax cash in pocket After tax cash in pocket

Tax bracket 1 775 Tax bracket 1 788 775
Tax bracket 2 692 Tax bracket 2 704 692
Tax bracket 3 610 Tax bracket 3 621 610
Tax bracket 4 565 Tax bracket 4 576 565
Tax bracket 5 465 Tax bracket 5 459 465

*** Input your province's corporate tax rate for the active business income with the SBD
The default data showing here is for all the provinces taxed at 3.5% as in Ontario
** The Personal taxes used here are not specific to any province. They presume = 50%
Differences in any actual Provincial personal tax rates don't make a material
But if you want accuracy, change the input rates at the bottom of the 'Rates'
IN THE YEAR ... WHICH IS BETTER
Small Business Deduction

ges or Dividends ?

Answer:
$ outcomes makes little difference except for QUE
The relationship between Prov and Fed rates will change each year.

Other factors decide the issue - CPP, RRSP cont room,

income splitting and smoothing, qualifying for mortgage,
Personal Services Corp rates, etc.

If the corp had previously earned investment income, and

there is a RDTOH balance that can be refunded, this choice
slants in favour of paying dividends, to recover that RDTOH.

Income-tested program benefits (like the Child Credit and GIS) are
impacted more by dividends because of their gross-up.

DIFFERENCE
1.6%
1.8%
1.8%
1.9%
-1.3%

ive business income with the SBD at cell F15 on the "Rates" sheet
ces taxed at 3.5% as in Ontario
any province. They presume = 50% of the Federal rate.
nal tax rates don't make a material difference.
t rates at the bottom of the 'Rates' tab
`
2021 Corporate Tax Rates and Personal Tax Rates for Each Income Type
http://www.cra-arc.gc.ca/
e.g. only http://www.taxtips.ca/sma
Corporate Tax Rates Federal Ontario Total https://home.kpmg.com/c
https://assets.ey.com/con
Part I Base Rate 38.00%
Provincial Tx Abatement -10.00% https://financesofthenatio
net 28.00%

General Rate Reduction -13.00%

Active Business no SBD 15.00% 11.5% 26.50%

Small Business Deduction -19.00%

ActiveBusinessIncomeSBD 9.00% 3.2% 12.20%

Personal Service Business 33.00% 11.50% 44.50%

Add'n refundable Part I tx 10.67%

Investment Income by CCPC 38.67% 11.50% 50.17%
Increase RDTOH account for Interest 30.67% 30.67% Starting 2018 will increase Non-Eligib

Base RDTOH for interest above 30.67%

reduction for 15% w/h tax reinbursed 38.79%
Increase RDTOH for Foreign Dividends 18.77% 18.77%

Part IV tx Cdn Eligible dividends 38.33% 38.33%

Increases RDTOH account 38.33% 38.33% Starting 2018 will increase Eligible RD

RDTOH recovered per dist'n 38.33% 38.33%

Personal Tax - presuming provinces tax at 50% of the Fed's rate

Income Non_Eligible Eligible Capital
Tax Bracket Limit Full Dividends Dividend Gains

0 13,808 0.0% -15.6% -31.1% 0.0%

1 49,020 22.5% 10.3% 0.0% 11.3%
2 98,040 30.8% 19.8% 11.3% 15.4%
3 151,978 39.0% 29.3% 22.7% 19.5%
4 216,511 43.5% 34.4% 28.9% 21.8%
5 53.5% 47.7% 39.3% 26.8%

These Personal tax rates are not accurate for each province.
These presume the Provincial rate is 50% of the Federal Rate for 2021
ttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/rts-eng.html
ttp://www.taxtips.ca/smallbusiness/corporatetax/corporate-tax-rates-2016.htm
ttps://home.kpmg.com/content/dam/kpmg/ca/pdf/2018/06/federal-and-provincial-territorial-tax-rates-for-income-earned-by-a-ccpc-2018.pdf
ttps://assets.ey.com/content/dam/ey-sites/ey-com/en_ca/topics/tax/tax-calculators/2021/ey-tax-rates-corporate-2021-06-15-v1.pdf

ttps://financesofthenation.ca/statutory-tax-rates/

will increase Non-Eligible RDTOH

will increase Eligible RDTOH

The provinces stagger their tax brackets inbetween Federal brackets.

So if you want to be exact for your own province you can over-write any selection
of these lines to reflect your own possibilities. The other tabs reference only the
1-5 numbers. What those 1-5 brackets represent can be changed.
http://www.taxtips.ca/marginaltaxrates.htm - which does not post the rate for the bottom Personal Exemption 'brac
arned-by-a-ccpc-2018.pdf
021-06-15-v1.pdf

Personal Exemption 'bracket'

 ????? Keep Operating Profits inside CCPC to Invest, or Pay out to Invest Personally in Taxed or
Separate boxes for Capital Gains, Cdn Dividends, Interest, and Foreign Income

CAPITAL GAINS Years of delay before spending

ABI with SBD $1,000 5 10 15 20 25 30
Rate of return 6%

Invest in Taxable Acct

Tax bracket 1 787.58 1,021 1,323 1,714 2,222 2,879 3,731

Tax bracket 2 704.28 902 1,156 1,480 1,896 2,428 3,111
Tax bracket 3 620.98 786 995 1,260 1,595 2,019 2,557
Tax bracket 4 575.55 724 910 1,145 1,440 1,811 2,278
Tax bracket 5 458.84 569 705 875 1,084 1,345 1,667

Invest in Tax Shelter

Tax bracket 1 787.58 1,054 1,410 1,887 2,526 3,380 4,523

Tax bracket 2 704.28 942 1,261 1,688 2,259 3,023 4,045
Tax bracket 3 620.98 831 1,112 1,488 1,992 2,665 3,567
Tax bracket 4 575.55 770 1,031 1,379 1,846 2,470 3,306
Tax bracket 5 458.84 614 822 1,100 1,472 1,969 2,635

Invest in Corporation

Tax bracket 1 878.00 1,036 1,345 1,730 2,210 2,808 3,552

Tax bracket 2 878.00 941 1,237 1,605 2,063 2,635 3,347
Tax bracket 3 878.00 847 1,129 1,480 1,917 2,462 3,141
Tax bracket 4 878.00 796 1,070 1,412 1,837 2,368 3,028
Tax bracket 5 878.00 664 919 1,236 1,632 2,125 2,740

Corp less Taxable

Tax bracket 1 1% 2% 1% -1% -2% -5%

Tax bracket 2 4% 7% 8% 9% 8% 8%
Tax bracket 3 8% 13% 17% 20% 22% 23%
Tax bracket 4 10% 18% 23% 28% 31% 33%
Tax bracket 5 17% 30% 41% 51% 58% 64%

Corp less Tx Shelter

Tax bracket 1 -2% -5% -8% -13% -17% -21%

Tax bracket 2 -0% -2% -5% -9% -13% -17%
Tax bracket 3 2% 2% -1% -4% -8% -12%
Tax bracket 4 3% 4% 2% -0% -4% -8%
Tax bracket 5 8% 12% 12% 11% 8% 4%
CANADIAN DIVIDENDS Years of delay before spending
ABI with SBD $1,000 5 10 15 20 25 30
Rate of return 6%

Invest in Taxable Acct

Tax bracket 1 787.58 1,054 1,411 1,888 2,527 3,382 4,527

Tax bracket 2 704.28 913 1,183 1,532 1,986 2,573 3,334
Tax bracket 3 620.98 779 977 1,226 1,537 1,928 2,419
Tax bracket 4 575.55 709 874 1,077 1,327 1,635 2,014
Tax bracket 5 458.84 549 656 784 938 1,122 1,341

Invest in Tax Shelter

Tax bracket 1 787.58 1,054 1,410 1,887 2,526 3,380 4,523

Tax bracket 2 704.28 942 1,261 1,688 2,259 3,023 4,045
Tax bracket 3 620.98 831 1,112 1,488 1,992 2,665 3,567
Tax bracket 4 575.55 770 1,031 1,379 1,846 2,470 3,306
Tax bracket 5 458.84 614 822 1,100 1,472 1,969 2,635

Invest in Corporation

Tax bracket 1 878.00 1,071 1,412 1,820 2,309 2,896 3,600

Tax bracket 2 878.00 956 1,257 1,619 2,053 2,573 3,196
Tax bracket 3 878.00 840 1,103 1,418 1,796 2,249 2,793
Tax bracket 4 878.00 777 1,019 1,309 1,656 2,073 2,573
Tax bracket 5 878.00 631 837 1,085 1,381 1,737 2,164

Corp less Taxable

Tax bracket 1 2% 0% -4% -9% -14% -20%

Tax bracket 2 5% 6% 6% 3% -0% -4%
Tax bracket 3 8% 13% 16% 17% 17% 15%
Tax bracket 4 10% 17% 22% 25% 27% 28%
Tax bracket 5 15% 28% 38% 47% 55% 61%

Corp less Tx Shelter

Tax bracket 1 2% 0% -4% -9% -14% -20%

Tax bracket 2 1% -0% -4% -9% -15% -21%
Tax bracket 3 1% -1% -5% -10% -16% -22%
Tax bracket 4 1% -1% -5% -10% -16% -22%
Tax bracket 5 3% 2% -1% -6% -12% -18%
INTEREST Years of delay before spending
ABI with SBD $1,000 5 10 15 20 25 30
Rate of return 6%

Invest in Taxable Acct

Tax bracket 1 787.58 989 1,241 1,557 1,955 2,453 3,079

Tax bracket 2 704.28 863 1,058 1,296 1,589 1,947 2,387
Tax bracket 3 620.98 743 890 1,065 1,274 1,525 1,826
Tax bracket 4 575.55 680 803 949 1,121 1,324 1,565
Tax bracket 5 458.84 526 604 693 795 913 1,047

Invest in Tax Shelter

Tax bracket 1 787.58 1,054 1,410 1,887 2,526 3,380 4,523

Tax bracket 2 704.28 942 1,261 1,688 2,259 3,023 4,045
Tax bracket 3 620.98 831 1,112 1,488 1,992 2,665 3,567
Tax bracket 4 575.55 770 1,031 1,379 1,846 2,470 3,306
Tax bracket 5 458.84 614 822 1,100 1,472 1,969 2,635

Invest in Corporation

Tax bracket 1 878.00 990 1,223 1,495 1,809 2,173 2,594

Tax bracket 2 878.00 885 1,094 1,336 1,617 1,943 2,320
Tax bracket 3 878.00 780 965 1,178 1,426 1,713 2,046
Tax bracket 4 878.00 723 894 1,092 1,322 1,588 1,896
Tax bracket 5 878.00 576 713 871 1,054 1,266 1,511

Corp less Taxable

Tax bracket 1 0% -1% -4% -7% -11% -16%

Tax bracket 2 3% 3% 3% 2% -0% -3%
Tax bracket 3 5% 8% 11% 12% 12% 12%
Tax bracket 4 6% 11% 15% 18% 20% 21%
Tax bracket 5 9% 18% 26% 32% 39% 44%

Corp less Tx Shelter

Tax bracket 1 -6% -13% -21% -28% -36% -43%

Tax bracket 2 -6% -13% -21% -28% -36% -43%
Tax bracket 3 -6% -13% -21% -28% -36% -43%
Tax bracket 4 -6% -13% -21% -28% -36% -43%
Tax bracket 5 -6% -13% -21% -28% -36% -43%

FOREIGN INCOME Years of delay before spending

 ABI with SBD $1,000 5 10 15 20 25 30
Rate of return 6%

Invest in Taxable Acct

Tax bracket 1 787.58 989 1,241 1,557 1,955 2,453 3,079

Tax bracket 2 704.28 863 1,058 1,296 1,589 1,947 2,387
Tax bracket 3 620.98 743 890 1,065 1,274 1,525 1,826
Tax bracket 4 575.55 680 803 949 1,121 1,324 1,565
Tax bracket 5 458.84 526 604 693 795 913 1,047

Invest in Tax Shelter

Tax bracket 1 787.58 1,054 1,410 1,887 2,526 3,380 4,523

Tax bracket 2 704.28 942 1,261 1,688 2,259 3,023 4,045
Tax bracket 3 620.98 831 1,112 1,488 1,992 2,665 3,567
Tax bracket 4 575.55 770 1,031 1,379 1,846 2,470 3,306
Tax bracket 5 458.84 614 822 1,100 1,472 1,969 2,635

Invest in Corporation

Tax bracket 1 878.00 984 1,218 1,489 1,803 2,167 2,589

Tax bracket 2 878.00 880 1,089 1,331 1,612 1,938 2,315
Tax bracket 3 878.00 776 960 1,174 1,422 1,709 2,041
Tax bracket 4 878.00 719 890 1,088 1,318 1,584 1,892
Tax bracket 5 878.00 573 710 867 1,050 1,263 1,508

Corp less Taxable

Tax bracket 1 -0% -2% -4% -8% -12% -16%

Tax bracket 2 2% 3% 3% 1% -0% -3%
Tax bracket 3 4% 8% 10% 12% 12% 12%
Tax bracket 4 6% 11% 15% 18% 20% 21%
Tax bracket 5 9% 17% 25% 32% 38% 44%

Corp less Tx Shelter

Tax bracket 1 -7% -14% -21% -29% -36% -43%

Tax bracket 2 -7% -14% -21% -29% -36% -43%
Tax bracket 3 -7% -14% -21% -29% -36% -43%
Tax bracket 4 -7% -14% -21% -29% -36% -43%
Tax bracket 5 -7% -14% -21% -29% -36% -43%
est Personally in Taxed or Shelter Accounts
Foreign Income

THESE COMMENTS APPLY TO ALL PROFIT

35 40 TYPES BELOW AS WELL

Gains are presumed realized and taxed each year.

4,836 6,267 The tax bracket chosen affects the $$ invested at the
3,984 5,104 start AND also the after-tax growth rate of the portfolio.
3,236 4,097 It is assumed not to change, even though a growing
2,865 3,603 taxable portfolio will put you into higher brackets over
2,067 2,563 time.

The tax bracket relevant for TFSA savings is the rate

at the time of distribution out to the owner. For an RRSP,
6,053 8,101 the personal income at distribution will be offset by the RRSP's
5,413 7,244 deduction, so the relevant rate is for the time of spending in
4,773 6,387 retirement. So for funds going into an RRSP, the argument
4,424 5,920 to leave funds inside the corp because lower rates are expected
3,527 4,720 later in life, is not valid.

4,480 5,637 The tax bracket chosen affects only the ending $$
4,233 5,338 net withdrawals from the corp for spending.
3,986 5,040
3,852 4,877
3,505 4,459

If you choose different brackets for different options

-7% -10% then reformat these two section to compare your
6% 5% chosen brackets.
23% 23%
34% 35% Red % means investing better personally.
70% 74% Black % means investing better in the corp.

If you choose different brackets for different options

-26% -30% then reformat these two section to compare your
-22% -26% chosen brackets.
-16% -21%
-13% -18% Red % means investing better personally.
-1% -6% Black % means investing better in the corp.
 35 40

6,058 8,108
4,321 5,599
3,034 3,805
2,482 3,058
1,603 1,917

6,053 8,101
5,413 7,244
4,773 6,387
4,424 5,920
3,527 4,720

4,444 5,456
3,944 4,841
3,445 4,227
3,172 3,891
2,676 3,289

-27% -33%
-9% -14%
14% 11%
28% 27%
67% 72%

-27% -33%
-27% -33%
-28% -34%
-28% -34%
-24% -30%
 35 40

3,865 4,851
2,925 3,585
2,185 2,615
1,849 2,184
1,201 1,378

6,053 8,101
5,413 7,244
4,773 6,387
4,424 5,920
3,527 4,720

3,083 3,649
2,757 3,263
2,431 2,877
2,253 2,667
1,796 2,126

-20% -25%
-6% -9%
11% 10%
22% 22%
50% 54%

-49% -55%
-49% -55%
-49% -55%
-49% -55%
-49% -55%
 35 40

3,865 4,851
2,925 3,585
2,185 2,615
1,849 2,184
1,201 1,378

6,053 8,101
5,413 7,244
4,773 6,387
4,424 5,920
3,527 4,720

3,077 3,644
2,752 3,258
2,426 2,873
2,249 2,663
1,793 2,123

-20% -25%
-6% -9%
11% 10%
22% 22%
49% 54%

-49% -55%
-49% -55%
-49% -55%
-49% -55%
-49% -55%
 Canadian Tax Integration - Compare Cdn Dividend Income Earned in Corporation vs. Earned Personally
This igores the fact that ABI in a CCP taxed at the SBD will be only half-taxed, allowing more capit

Eligible Dividends Earned Personally Cdn Eligible Dividends Earned in Corporation then Dividend'ed to Pers

100.00 Dividends earned in corp

38.33 Part 4 Taxes paid
61.67 net cash in corp
38.33 RDTOH account increased
100.00 Increase in GRIP

100.00 Dividends earned personally 99.99 Eligible dividends rec'd by person

because GRIP balance

$ Paid Tax Bracket Tx Paid Tax Bracket

(31.09) 0 (31.09) -
(0.04) 1 (0.04) 1
11.34 2 11.34 2
22.73 3 22.73 3
28.94 4 28.94 4
39.34 5 39.34 5

After-tax dividend income After-tax dividend income

Dividend Inc. Tax Bracket Dividend Inc. Tax Bracket
131.09 0 131.08 -
100.04 1 100.03 1
88.66 2 88.65 2
77.27 3 77.27 3
71.06 4 71.06 4
60.66 5 60.66 5

Correct tab "Corp + Personal Tax Rates" for your own provinces actual rates
tion vs. Earned Personally
half-taxed, allowing more capital to invest

ion then Dividend'ed to Person

Dividends paid RDTOH recovered

61.67 23.64
23.64 9.06
9.06 3.47
3.47 1.33
1.33 0.51
0.51 0.20
0.20 0.07
0.07 0.03
0.03 0.01
0.01 0.00
99.99 sum 38.33

`
 Foreign Tax Integration - Compare Foreign Dividend Income Earned in Corporation vs. Earned Persona
This igores the fact that ABI in a CCP taxed at the SBD will be only half-taxed, allowing more capit

Foreign Dividends Earned Personally Foreign Dividends Earned in Corporation then Dividend'ed to Person

100.00 Dividends earned in corp

50.17 Taxes paid
18.77 RDTOH account increased
49.83 net cash in corp

Dividends paid RDTOH recovered

49.83 18.77
18.77 -
68.60 sum 18.77

100.00 Dividends earned personally 68.60 non Eligible dividends rec'd by person

$ Paid Tax Bracket Tx Paid Tax Bracket

0.00 0 (10.69) 0
22.50 1 7.06 1
30.80 2 13.57 2
39.00 3 20.08 3
43.50 4 23.63 4
53.53 5 32.75 5

After-tax After-tax
Dividend Inc. Tax Bracket Dividend Inc. Tax Bracket
100.00 0 79.29 0
77.50 1 61.54 1
69.20 2 55.03 2
61.00 3 48.52 3
56.50 4 44.97 4
46.47 5 35.85 5

Correct tab "Corp + Personal Tax Rates" for your own provinces actual rates
ration vs. Earned Personally
half-taxed, allowing more capital to invest

hen Dividend'ed to Person

`
 Canadian Tax Integration - Compare Interest Income Earned in Corporation vs. Earned Personally
This igores the fact that ABI in a CCP taxed at the SBD will be only half-taxed, allowing more capita

Interest Earned Personally Interest Earned in Corporation then Dividend to Person

100.00 Interest earned by corp

50.17 Taxes paid in corp
30.67 RDTOH account increased
49.83 net cash in corp
80.02 Div paid to recover RDTOH
30.67 RDTOH recovered
0.48 net cash in corp
0.48 div paid without RDToH recovery

100.00 Interest earned by person 80.50 non Eligible dividends rec'd by person

$ Paid Tax Bracket Tx Paid Tax Bracket

0.00 0 (12.54) -
22.50 1 8.29 1
30.80 2 15.93 2
39.00 3 23.56 3
43.50 4 27.73 4
53.53 5 38.43 5

After-tax After-tax
Interest Inc. Tax Bracket Interest Inc. Tax Bracket
100.00 0 93.04 -
77.50 1 72.21 1
69.20 2 64.57 2
61.00 3 56.94 3
56.50 4 52.77 4
46.47 5 42.07 5

Correct tab "Corp + Personal Tax Rates" for your own provinces actual rates
s. Earned Personally
half-taxed, allowing more capital to invest

nd to Person
 Canadian Tax Integration - Compare Capital Gains Earned in Corporation vs. Earned Personally
This igores the fact that ABI in a CCP taxed at the SBD will be only half-taxed, allowing more capital to invest

Capital Gains Earned Personally Capital Gains Earned in Corporation then Dividend to Person

100.00 Capital gains earned by corp

50.00 Half untaxed and dividended to person
50.00 Half taxed in corp
25.09 Taxes paid in corp
15.33 RDTOH account increased
24.92 net cash in corp
40.01 Dividends paid to recover RDTOH
15.33 RDTOH recoverd
0.24 net cash in corp
0.24 div paid without RDToH recovery

50.00 Tax free capital dividend rec'd by person

100.00 Capital gains earned by person 40.25 non Eligible dividends rec'd

$ Paid Tax Bracket Tx Paid Tax Bracket

0.00 0 (6.27) -
11.30 1 4.14 1
15.40 2 7.96 2
19.50 3 11.78 3
21.80 4 13.87 4
26.76 5 19.22 5

After-tax After-tax
Capital Gains Tax Bracket Capital Gains Tax Bracket
100.00 0 96.52 -
88.70 1 86.11 1
84.60 2 82.29 2
80.50 3 78.47 3
78.20 4 76.38 4
73.24 5 71.03 5

Correct tab "Corp + Personal Tax Rates" for your own provinces actual rates
Earned Personally
allowing more capital to invest

Dividend to Person
 Corporate Tax Treatment of Income and Nominal Running Tallies

Dividends Received
Non-eligible dividends paid or received between connected companies are ignored on this spreadsheet.
Foreign dividends are included with other Investment Income taxed under Part I
Cdn Eligible dividends taxed under Part IV tax at 38.33% Not taxed under Part I
Provinces appear to not tax the Part IV equivalent
Part 4 taxes $$ paid increase the nominal amount of the RDTOH dollar for dollar

Capital Gains/Losses Realized

Half are not taxed. Nominal running tally = capital dividend account Section 83(2) and 89(1)(b)
No tax refund on dividends paid out of Capital Dividend Account. And tax free to person paid.
A capital dividend does not affect the ACB of the shares for the corp.
The half that are taxed are included within the category "Investment Income".

Investment Income - both Cdn and Foreign

Interest, Rents, half of Capital Gains, Foreign dividends
Excludes Cdn dividends and active business income.
All distributions from foreign companies are presumed dividends on which the 15% withholdings tax was d
RDTOH addition = 30.67% of investment income

Active Business Income

All assumed to get the Small Business Deduction.
If this is a Personal Service Business use the specific Federal tax rate plus the province's higher rate.
Sur Taxes are ignored as too difficult to model
The provinces have two tax rates. A low rate for CCPC getting SBD. The high rate for everything else.
Dividends paid from this after-tax are "NOTelibible" and taxed at higher rates in the hands of persons.

RDTOH
Running tally of RDTOH equals Part IV taxes paid on Cdn Eligible dividends received
PLUS 30.67% of Investment Income (up from 2015 24.67%)
LESS refunds claimed on dividend payemnts
IT-243 http://www.cra-arc.gc.ca/E/pub/tg/t4012/t4012-08-e.html#P3042_223637
Taxes refunded if dividend paid is Taxable. May be either Eligible of Non-Eligible Dividend paid.
= 38 1/3% of $dividend paid, to max $ of RDTOH
Only offsets other taxes owing.

GRIP
running tally of after-tax ABI NOT getting SBD (none presumed in this spreadsheet)
Includes Cdn Eligible dividends it receives.
Does not include Investment income.
This determines whether dividends paid will be Eligible or Not
 New Rule starting 2018 year

gnored on this spreadsheet.

under Part I

This now funds the Eligible RDTOH

n 83(2) and 89(1)(b)

ee to person paid.

he 15% withholdings tax was deducted but recovered by the CCPC

This now funds Non-Eligible RDTOH

he province's higher rate.

igh rate for everything else.

s in the hands of persons.

Eligible RDTOH funded by refundable Part 4 tax on Eligible Div Income

refunded when Eligible Dividend paid
refunded by Non-eligible div paid only when Non-Elig RDTOH exhausted

l#P3042_223637 Non-Eligible RDTOHcarry over from old generic RDTOH

igible Dividend paid. funded by 30.67% of Investment Income
(and non-eligible dividend income which is being ignored on this spreadsheet)
refunded when Non-eligible dividend paid
this spreadsheet)
Tax Rates
http://www.revenuquebec.ca/en/salle-de-presse/nouvelles-fiscales/2015/2015-04-16.aspx
http://www.ey.com/Publication/vwLUAssets/Tax-Rates-Corporate-2016/$FILE/Tax-Rates-Corporate-2016
https://www.sunlife.ca/files/advisorabc/english/pdf/Corporate_Retirement_Strategy_RDTOH.pdf
http://htkconsulting.com/HTKNotes/Tax/Corporate/corporate%20distributions/GENERAL%20RATE%20IN
http://thetaxissue.com/get-a-grip/
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/rts-eng.html
http://www.ey.com/Publication/vwLUAssets/Tax-Rates-Corporate-Investment-2016/$FILE/Tax-Rates-Cor
2015 Personal tax calculator - EY - Canada - EY - Canada
http://www2.deloitte.com/ca/en/pages/tax/articles/canadian-tax-alert-new-governments-proposed-tax-cha
http://www.taxtips.ca/marginaltaxrates.htm
http://www.ey.com/Publication/vwLUAssets/Tax-Rates-Corporate-2017/$FILE/Tax-Rates-Corporate-2017

Corporate tax analysis by Golumbec

https://www.cibc.com/ca/pdf/small-business/tfsas-for-business-owners-en.pdf
https://www.cibc.com/ca/pdf/jg-dividends-bonus-en.pdf
https://www.cibc.com/content/dam/small_business/in-good-company-en.pdf
http://www.jamiegolombek.com/articledetail.php?article_id=1088

http://www.cra-arc.gc.ca/E/pub/tg/t4012/t4012-08-e.html#P3042_223637
 15-04-16.aspx
LE/Tax-Rates-Corporate-2016.pdf
Strategy_RDTOH.pdf When they talk about dividends I believe they are only referring to Cdn Elibible dividends taxed un
ns/GENERAL%20RATE%20INCOME%20POOL.pdf ?????? "after grossing up the dividend and applying the federal a

nt-2016/$FILE/Tax-Rates-Corporate-Investment-2016.pdf

overnments-proposed-tax-changes.html

LE/Tax-Rates-Corporate-2017.pdfQue required minimum wages hours paid/yer for CCPC

n Elibible dividends taxed under Part IV
nd and applying the federal and provincial dividend tax credits."
 2018 Federal Budget changes to Passive Income earned by small business using Small Busine

26.5% Tax rate on Active Buiness w/o SBD

12.2% Tax rate on Active Business with SBD = lower tax rate by 14.3%
$ 500,000 Active income allowed taxed under SBD
$ 5 SBD limit reduced for every dollar of passive income above $50,000
$ 50,000 Passive income allowed by CCPC with SBD without any penalties
6.0% Taxed profits earned by passive investments (if capital gains then divide in half) = portfolio assets

Passive Income Portfolio S

Allowed No Penalty no Pena
160,000 3

140,000
2
120,000
2
100,000

80,000 1

60,000
1
40,000
5
20,000
Active Business Income
- -
0 0 0 0 0 0 0 0 0 0 0
,00 0 ,00 0 ,00 0 ,00 0 ,00 0 ,00 0 ,00 0 ,00 0 ,00 0 ,00
50 10 15 20 25 30 35 40 45 50
usiness using Small Business Deduction to reduce tax on Active Business

Portfolio Passive Reduction

Value Income from SBD
Limit

2,500,000 150,000 500,000

2,333,333 140,000 450,000
= portfolio assets $ 833,333 2,166,667 130,000 400,000
2,000,000 120,000 350,000
1,833,333 110,000 300,000
1,666,667 100,000 250,000
Portfolio Size
no Penalty 1,500,000 90,000 200,000
1,333,333 80,000 150,000
3,000,000 1,166,667 70,000 100,000
1,000,000 60,000 50,000
833,333 50,000 -
2,500,000

2,000,000

1,500,000

1,000,000

500,000

Business Income
-
0 0 0
,00 0 ,00 0 ,00
45 50
 SBD
limit
remaining

0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000