Tax Benefits in Canada

If you are an entrepreneur in Canada, you may be wondering about the tax implications of registering your business as a corporation. There is no denying in the fact that incorporating your business can offer several tax benefits resulting in significant savings. The revenue you generate from an unincorporated firm is reported on your personal tax return which is treated as a sole proprietorship, if you have partners then a partnership. To obtain tax benefits that are not available to individuals, the majority of business owners opt to incorporate their company.

There are several advantages that encourage entrepreneurs to incorporate their businesses, some of which are listed below:

  1. Protect Personal Assets: The fundamental advantage of incorporating a business is protecting personal assets from any litigation brought against the corporation. However, in exceptional circumstances the corporation’s directors could be held vicariously liable for some of the company’s responsibilities.
  2. Business Expense Deductions: If you keep track of the costs incurred during a company’s fiscal year, you may deduct those expenses while paying income tax, which can be advantageous for your company. Some of the main operating expenses that you can deduct from your taxes are startup costs, office expenses, salaries, travel, rent, and so forth.
  3. Employee Benefits Deductions: Canadian businesses that are incorporated have the added advantage of being able to deduct employee benefits from their taxes. On the other hand, unincorporated businesses are not eligible for such deductions.
  4. Tax Deferral: Incorporating your business provides the option to defer personal taxation on the income earned by your business for personal use by leaving it within the corporation. The same income can be put back into the company or used towards other investments.
  5. Income Flexibility: Once your business is incorporated, you have the flexibility to take your income in the form of dividends instead of a salary which is one of the usual way to reduce the tax bill.

How the Startup Visa Services team helps

Startup Visa Services team comprises highly skilled professionals with significant experience in business, finance, marketing, intellectual property and auditing. At Startup Visa Services (SVS), our experts can guide you to overcome any tax-related hurdles that may be impeding the growth of your company. To qualify for all the benefits that comes with registering a corporation, it is essential to comply with incorporation at the first place. At SVS, we take care of the entire registration process, including preparing the required documents and ensuring that you meet all the legal criteria.

Are you an immigration expert who helps entrepreneurs looking to launch or expand their businesses in Canada? Get in touch with us to learn more about how we can assist and support your clients with Canadian in matters pertaining to Canadian corporation registration and tax planning.