Taxes on Business Income-Canada
- Business income is first calculated according to Canadian generally accepted accounting principles (very similar to the UK) and then adjusted as required by the Income Tax Act (ITA) to determine taxable income.
- This can be complex.
- The tax system is designed so that the total tax payable on income is the same regardless of whether it is earned directly by an individual or through a corporation.
- Like everything else, the integration is not perfect, and there are opportunities for some tax planning if you are self-employed or in business.