Choosing to incorporate your business has many tax advantages, especially if the corporation meets the criteria of a CCPC (Canadian Controlled Private Corporation). The three main tax advantages include:
1. Reduced corporate tax rate. For corporations resident in BC that qualify for the Small Business Deduction, the corporate tax rate is only 13.5%! (That is a reduction of 17%).
2. Additional month to pay corporate tax. The due date for corporate tax payable is extended by one month (from two months after the year end to three).
3. Capital gains exemption. When a CCPC is sold, there is an entitlement to the $750,000 enhanced lifetime capital gains exemption provided the shares are of a Qualifying Small Business Corporation (QSBC) and the taxpayer has not previously utilized this deduction.
If you are currently operating a business that is not yet incorporated and are ready to take advantage of these tax saving opportunities, give us a call; we can help you make the transition.