Topics to Discuss
- Introduction: Tax Reform in Canada and Internationally
- Proposals to Modify the Taxation of Passive Investment Income of Private Corporations
- Proposals to Amend the Voluntary Disclosure Programme
- Proposals to Commit to the Common Reporting Standard and Provide Automatic Exchange of Tax Information to Foreign Tax Authorities
Taxation of Passive Investment Income of a Private Corporation
- Policy Statement in Budget 2017
- When private corporations earn income beyond what is needed to re‐invest and grow the business, fairness and neutrality require that such corporations not be used as a personal savings vehicle for the purpose of gaining a tax advantage
- This use of a private corporation's lower tax rate to invest after‐tax proceeds in passive investments results in a realization of returns that exceed what individual investors saving in a personal investment can achieve
- The objective of the "integration" rules for taxing investment income is to ensure that a dollar of such income earned through a corporation bears a tax burden, when corporate and personal taxes are combined, that is roughly similar to that of a dollar of such passive income earned directly by an individual
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