The demands and expectations of the global and domestic market are constantly bringing challenges. Taxes represent a significant expense for each business. Effective tax planning, tailored to your needs, will minimize your taxes and maintain your competitive advantage.
The Life Cycle Scan
Our approach to tax planning at FY extends beyond interpreting tax legislations. We provide a Life Cycle Scan of your business as a road map towards meeting your goals and objectives. At each stage of your business life cycle, we sit down with you to map out a comprehensive tax efficient strategy designed to meet your immediate, mid-term and future objectives.
Estate Tax Planning
International Tax Services
Non-Residents Tax Compliance
A Holistic Approach
We believe the best tax minimization plan requires frequent communication with our clients. Constant communication provides the opportunity for us to develop a comprehensive understanding of our client’s objectives and requirements. We take a holistic approach, integrating steps to effectively manage your personal tax and corporate tax strategy.
An owner-manager’s remuneration strategy must be reviewed as circumstances change from year to year. In most instances, it is not just about paying the owner enough salary in order for the company to pay the least amount of corporate tax. The appropriate remuneration package would consider a combination of the following:
- Shareholders Loans
- Tax Free Capital Dividends
There are also factors to consider when implementing a remuneration strategy, such as:
- Maximizing Canada Pension Plan premium contributions
- Maximizing RRSP contribution limit
- Paying family members a reasonable salary
- Retaining income in the company for re-investment
- Taking advantage of available business or investment losses
- Paying a tax-free dividend to your holding company
- Using a holding company to protect corporate assets
Transfer Pricing Strategies
Wealth Enhancement Strategies
Our tax advisers will work with you to develop strategies to increase after tax wealth. For instance, some points to consider:
Contribute to a Tax –Free Savings Account
Canadian residents aged 18 or older can contribute up to $5,500 per year to a tax-free savings account (TFSA). Properly utilized, TFSAs can be used to split income with a spouse, reduce taxable income, and reduce the clawback of income-tested benefits.
Contributions and withdrawals must be carefully planned. A tax applies to all contributions exceeding your TFSA contribution room.
Plan to Generate Profits as Capital Gains
Whenever possible, classify profits as capital gains and losses as business losses. You will pay 50% less when you realize a profit and conversely deduct 50% more when you incur a loss.
Owner-managers of active businesses, that are Canadian controlled private corporations, can take advantage of the enhanced capital gains exemption. Each individual shareholder is entitled to claim up to $750,000 of tax free capital gains on sale of his/her shares.
Claim Business Losses for all Commercial Activities
Whereas profits should be treated as capital gains when the opportunity arises, losses should be treated as business losses whenever commercial activities exist. This means that you are allowed to deduct 100% of the losses, rather than 50% of capital losses.
Suite 800 - 1040 West Georgia Street
Vancouver, BC, V6E 4H1
North Vancouver, BC V7P 3P2