2017 has been a year of drama for Vancouver tax advisors and I am happy that it is coming to an end. I have to admit, it is not so much January 1, 2018 I am looking forward to. I am anxiously waiting for the 2018 budget date which may bring all Canadian private corporations more clarity on their financial and tax future. Vancouver Tax Planning - Changes For Private Coporations On July 18, 2017, Ottawa proposed dramatic changes to the taxation of private corporations. Since then, Ottawa has ... Read More
Vancouver Tax Planning: Time to Look at the Capital Dividend Account
As we reach the mid-point of the 2017 calendar year, it has been a good financial year for many British Columbian investors. Real estate gains continue and, for equity investors, the stock market has been on a tear since the fall of 2016. Vancouver Corporate Tax Planning With the conclusion of the personal tax-filing season, summer and fall is the time for corporate tax planning. The one tax planning item that should be looked at this year, due to such favorable macro-financial conditions, is ... Read More
More Reasons for BC Businesses to Incorporate
Small business corporate tax rates in BC heading downwards
Several changes to tax legislation announced in the 2015 Canadian federal budget were recently granted Royal Assent. A measure that is highly relevant for small businesses in BC going forward is the gradual decrease in the combined federal and provincial corporate tax rates over the next 4 years, which are as follows: 13.5 % - present rate 13.0 % - effective January 1, 2016 12.5 % - effective January 1, 2017 12.0 % - ... Read MoreUse of Family Trust for Income Splitting
Income Splitting Using a Family Trust As discussed and referenced in previous blog posts, a successful corporation with surplus retained earnings can reap large tax-saving benefits from income splitting when done with spouse and children. When the owner/shareholder of a business wishes to take advantage of income splitting opportunities as his children reach adult age, the easiest and most economical way to accomplish this is by restructuring the existing share classes and holdings. Ideally, ... Read More
Effective Income Splitting Needs Professional Pre Planning
Income Splitting Pre Planning We are now firmly into the 2015 calendar year and with the New Year come new tax laws aimed at reducing your family’s tax burden (eg. recently announced family tax cuts) and changes to existing tax laws that reduce old benefits (eg. higher personal taxes on ineligible dividends).
Ineligible Dividends
Ineligible dividends are essentially the type of dividends that most profitable Canadian small business owners get from their corporations. They represent the ... Read MoreThe Costly Consequences of Pretending To Be An Incorporated Consultant
Canadian corporations enjoy a 13.5% corporate tax rate on the first $500,000 of taxable income from active business due to the small business deduction. Therefore, it makes sense for a corporation to structure its business affairs in ways that can take full advantage of this favourable tax rate. The majority of Canadian businesses qualify for the above benefit. However, some “consultants” who may have incorporated their service businesses may be taking advantage of the low corporate tax rate, ... Read More
Tax Planning Tips for IT Consultants
Are you one of the many IT professionals currently working in the booming tech sector in the Vancouver area? You may be paying too many unnecessary taxes! Here are some helpful tips, courtesy of your Vancouver Chartered Accountants at Mew and Company: Determine if you are in fact self-employed under CRA’s definition. The RC4110 guide from CRA is written for laymen and is easy to understand. If you do not meet the definition of “self-employed” using the criteria listed in this guide, but you ... Read More
Canadian Tax Planning for U.S. Executives Working in Canada
How U.S. Executives Working in Canada Are Required To File Their Tax Returns Many U.S. executives move to Canada, for both brief and prolonged periods, to manage Canadian head offices for multinational or parent companies. During their time in Canada, these executives become full time residents and are therefore required to file a Canadian tax return. Unlike Canada, the U.S. tax system is based on U.S. citizenship, and therefore the U.S. executive is burdened with the requirement to file both a ... Read More
Ending a Business Marriage: A Tax Perspective
Maybe your business has been struggling since the 2008-2009 financial crisis, or better yet, maybe the business has become more profitable every year since due to better management practices and branding. Despite progress or track record, maybe your finding that the relationships between the two or more shareholders involved in your business are strained, and this could be for various reasons. For example, one shareholder may not be pulling their weight because of personal issues while another ... Read More
