RSM424H1 Chapter Notes - Chapter 11: Dividend Tax, Umber, Retained Earnings
22 Feb 2017
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The effect of double taxation is modified by the dividend tax credit, which the individual can apply to reduce the personal tax on dividends received from canadian corporations. This reduction represents a credit for all or a portion of the corporate taxes paid on the income represented by the dividend. In a public corporation, double taxation on returns to the owner is automatic; in a ccpc, it may or may not occur depending on the nature of the income. In either case, the combination of corporate tax and tax on distributions to shareholders has an impact on dividend policy, capital (debt/equity) structures, and the form of business organization. The framework of the canadian income tax system: Individuals and corporations are the 2 primary entities subject to tax in canada, as well as trusts. Individuals and corporations that are resident in canada are taxable on their world income. Non-resident individuals and corporations are taxable only on certain income derived in.
