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Lecture 8

AFM362 Lecture 8: Mod 8 - Taxes payable - CCPC

Accounting & Financial Management
Course Code
Andrew Bauer

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Mod 8: taxes payable - CCPC
Type of corporation and type of income determines the tax rates that apply to different types of
Tax adjustments for private corporations
Contributes to integration of the tax system
Small business deduction (SBD) CCPC only
Additional refundable tax (ART) CCPC only
Part IV tax
Refundable dividend tax on hand (RDTOH)
Dividend Refund
Small Business Deduction
19% of the least of:
Canadian active business income;
Taxable income less foreign-source income
The business limit (max $500,000, less any phase-out) less portion allocated to
associated corporations
Active business income (ABI)
Income from an adventure in the nature of trade
Business income of a Corporation
Personal services business income
Specified investment business income
Active business income
Only Canadian active business income is eligible for SBD
Active Business income
Specified Investment Business (SIB)
Principal purpose is to earn income from property
Unless it has more than five full-time employees
Personal Services Business (PSB)
Incorporated employee
Unless it has more than five full-time employees
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