Passive Investment Income Corporation Canada

Corporate passive investment income active business income is generally the main and incidental income that a corporation earns from a business source carried on in canada.

Passive investment income corporation canada. Passive investment income on july 18 2017 the government released a consultation paper with proposals to address tax planning strategies using private corporations including an outline of possible approaches to limit the tax deferral opportunities that are associated with holding passive investments inside a private corporation. There are no graduated tax rates for corporate investment income. Low risk investments like guaranteed investment certificates gics and personal savings accounts are typically low yield sources of passive income where the owner earns small amounts of interest proportionate to the amount of money invested. Passive income canada investments one of the most common methods of earning passive income is through the ownership of financial investments.

These changes will apply where a corporation earns passive investment income and also earns income from active business that is taxed at the small business rate or small business income. The recent federal budget proposed changes the proposals that will restrict access to the small business deduction sbd for many corporations.