Archived - Tax Planning Using Private Corporations: text version
Chart 1
General and Small Business Corporate Income Tax Rates
| 2000 | 2017 | 2017 (Small Business) | |
|---|---|---|---|
| United Kingdom | 30.0 | 19.0 | 19.0 |
| Canada | 42.4 | 26.7 | 14.4 |
| Italy | 41.3 | 27.8 | 27.8 |
| Japan | 40.9 | 30.0 | 21.4 |
| Germany | 52.0 | 30.2 | 30.2 |
| France | 37.8 | 34.4 | 15.0 |
| United States | 39.3 | 38.9 | 19.8 |
Chart 2
Total Tax Index, 2016
| Total Tax Index, 2016 | |
|---|---|
| Canada | 52.4 |
| United Kingdom | 64.5 |
| Germany | 97.9 |
| United States | 100.0 |
| Japan | 108.2 |
| Italy | 110.5 |
| France | 136.6 |
Chart 3
Time to prepare and pay taxes (hours), 2016
| Time to prepare and pay taxes (hours), 2016 | |
|---|---|
| United Kingdom | 110 |
| Canada | 131 |
| France | 139 |
| Japan | 175 |
| United States | 175 |
| Germany | 218 |
| Italy | 240 |
Chart 4
Trend in Taxable-Active-Income-to-GDP Ratio, by Type of Business
| Canadian Controlled Private Corporations (CCPCs) | Public Corporations and Private Corporations other than CCPCs | Individuals with Self-employment Income | |
|---|---|---|---|
| 2002 | 3.2% | 5.5% | 3.8% |
| 2003 | 3.3% | 6.1% | 3.6% |
| 2004 | 3.6% | 7.1% | 3.6% |
| 2005 | 3.9% | 6.9% | 3.5% |
| 2006 | 4.3% | 7.3% | 3.5% |
| 2007 | 4.7% | 6.8% | 3.5% |
| 2008 | 5.0% | 6.7% | 3.3% |
| 2009 | 5.3% | 7.2% | 3.4% |
| 2010 | 5.3% | 6.7% | 3.2% |
| 2011 | 5.7% | 7.1% | 3.0% |
| 2012 | 6.2% | 7.1% | 3.0% |
| 2013 | 6.4% | 7.1% | 2.8% |
| 2014 | 6.7% | 7.1% | 2.8% |
Chart 5
Combined Federal-Provincial-Territorial Statutory Top Marginal Personal Income Tax and Corporate Income Tax Rates, General and Small Business Rate
| Top Combined Federal-Provincial-Territorial Personal Income Tax Rate | Combined Federal-Provincial-Territorial General Corporate Income Tax Rate | Combined Federal-Provincial-Territorial Small Business Rate | |
|---|---|---|---|
| 2000 | 46.0 | 42.4 | 20.1 |
| 2001 | 46.0 | 40.5 | 19.6 |
| 2002 | 45.6 | 38.0 | 19.3 |
| 2003 | 45.6 | 35.9 | 19.0 |
| 2004 | 45.6 | 34.4 | 18.7 |
| 2005 | 45.6 | 34.2 | 18.6 |
| 2006 | 45.6 | 33.9 | 18.3 |
| 2007 | 45.5 | 33.9 | 18.2 |
| 2008 | 45.4 | 31.4 | 15.7 |
| 2009 | 45.4 | 30.9 | 15.8 |
| 2010 | 45.3 | 29.4 | 15.5 |
| 2011 | 45.3 | 27.7 | 15.3 |
| 2012 | 45.9 | 26.1 | 15.2 |
| 2013 | 46.9 | 26.2 | 15.2 |
| 2014 | 47.1 | 26.2 | 15.2 |
| 2015 | 47.5 | 26.7 | 15.2 |
| 2016 | 51.6 | 26.7 | 14.7 |
| 2017 | 51.6 | 26.7 | 14.4 |
Chart 6
'Non-Eligible' Dividends Reported on T1 Returns, By Age of Filers ($million)
| Age | 2006 | 2010 | 2014 |
|---|---|---|---|
| 0 | 0 | X | X |
| 1 | 0 | X | 0 |
| 2 | 0 | 0 | 0 |
| 3 | 1 | 0 | 0 |
| 4 | 1 | 0 | 0 |
| 5 | 1 | 1 | 0 |
| 6 | 1 | 0 | 0 |
| 7 | 1 | 0 | 0 |
| 8 | 1 | 1 | 0 |
| 9 | 1 | 0 | 0 |
| 10 | 2 | 1 | 1 |
| 11 | 1 | 1 | 1 |
| 12 | 2 | 1 | 1 |
| 13 | 2 | 1 | 1 |
| 14 | 3 | 1 | 1 |
| 15 | 3 | 1 | 1 |
| 16 | 3 | 1 | 1 |
| 17 | 4 | 2 | 3 |
| 18 | 91 | 137 | 158 |
| 19 | 98 | 162 | 192 |
| 20 | 99 | 167 | 207 |
| 21 | 94 | 160 | 210 |
| 22 | 90 | 153 | 205 |
| 23 | 86 | 132 | 187 |
| 24 | 78 | 129 | 182 |
| 25 | 70 | 124 | 174 |
| 26 | 76 | 119 | 179 |
| 27 | 79 | 123 | 193 |
| 28 | 81 | 134 | 225 |
| 29 | 92 | 153 | 255 |
| 30 | 110 | 171 | 300 |
| 31 | 127 | 193 | 359 |
| 32 | 146 | 225 | 413 |
| 33 | 186 | 259 | 458 |
| 34 | 195 | 299 | 488 |
| 35 | 231 | 322 | 541 |
| 36 | 258 | 373 | 583 |
| 37 | 280 | 392 | 616 |
| 38 | 293 | 438 | 645 |
| 39 | 327 | 462 | 685 |
| 40 | 350 | 517 | 723 |
| 41 | 376 | 530 | 737 |
| 42 | 450 | 526 | 766 |
| 43 | 459 | 539 | 804 |
| 44 | 503 | 563 | 814 |
| 45 | 483 | 594 | 822 |
| 46 | 564 | 662 | 793 |
| 47 | 507 | 654 | 799 |
| 48 | 562 | 671 | 822 |
| 49 | 576 | 659 | 849 |
| 50 | 535 | 708 | 932 |
| 51 | 593 | 676 | 914 |
| 52 | 505 | 722 | 900 |
| 53 | 485 | 669 | 896 |
| 54 | 482 | 650 | 924 |
| 55 | 479 | 689 | 907 |
| 56 | 514 | 619 | 852 |
| 57 | 555 | 600 | 848 |
| 58 | 478 | 573 | 836 |
| 59 | 498 | 537 | 832 |
| 60 | 482 | 565 | 788 |
| 61 | 471 | 549 | 776 |
| 62 | 422 | 545 | 724 |
| 63 | 407 | 537 | 676 |
| 64 | 401 | 513 | 675 |
| 65 | 319 | 422 | 630 |
| 66 | 326 | 382 | 566 |
| 67 | 291 | 342 | 504 |
| 68 | 247 | 325 | 469 |
| 69 | 247 | 267 | 387 |
| 70 | 214 | 266 | 379 |
| 71 | 226 | 264 | 321 |
| 72 | 189 | 209 | 282 |
| 73 | 187 | 165 | 235 |
| 74 | 180 | 169 | 217 |
| 75 | 193 | 145 | 180 |
| 76 | 186 | 151 | 163 |
| 77 | 159 | 136 | 143 |
| 78 | 166 | 131 | 144 |
| 79 | 135 | 147 | 131 |
| 80 | 113 | 119 | 122 |
| 81 | 136 | 96 | 120 |
| 82 | 88 | 102 | 105 |
| 83 | 75 | 75 | 94 |
| 84 | 74 | 99 | 83 |
| 85 | 73 | 78 | 76 |
| 86 | 45 | 58 | 68 |
| 87 | 37 | 52 | 50 |
| 88 | 25 | 42 | 52 |
| 89 | 23 | 40 | 50 |
| 90 | 39 | 34 | 42 |
| 91 | 15 | 26 | 36 |
| 92 | 10 | 12 | 25 |
| 93 | 8 | 14 | 15 |
| 94 | 8 | 7 | 15 |
| 95 | 6 | 7 | 8 |
| 96 | 2 | 7 | 8 |
| 97 | 5 | 2 | 8 |
| 98 | 4 | 3 | 3 |
| 99 | 2 | 1 | 3 |
| 100 | 1 | 2 | 2 |
Chart 7
Comparison of After-Tax Passive Investments Returns for an Individual Investing After-Tax Proceeds on $100,000 of Earnings, Directly or Through a Corporation (interest income, 3 per cent return), over a Specified Investment Horizon
| Return on personal savings account | Return achieved from holding savings in a private corporation | |
|---|---|---|
| 10 Years | 6,900 | 12,551 |
| 20 Years | 14,825 | 28,458 |
| 30 Years | 23,927 | 48,651 |
Chart 8
Tax Advantage of Retaining Business Income in a CCPC for Personal Savings Purposes
| Year | Saving in personal taxable account | Saving in TFSA | Saving in CCPC |
|---|---|---|---|
| 1 | 46,470 | 46,470 | 85,000 |
| 2 | 48,396 | 49,026 | 89,377 |
| 3 | 50,376 | 51,752 | 94,002 |
| 4 | 52,423 | 54,659 | 98,900 |
| 5 | 54,547 | 57,763 | 104,094 |
| 6 | 56,758 | 61,076 | 109,609 |
| 7 | 59,065 | 64,615 | 115,469 |
| 8 | 61,477 | 68,397 | 121,703 |
| 9 | 64,004 | 72,440 | 128,339 |
| 10 | 66,653 | 76,764 | 135,407 |
| 11 | 67,454 | 81,389 | 141,508 |
| 11 (After Distribution) | 86,382 |