74  /

Integration—Cost and Benefit of Incorporation 

for Investment Income

B.C.

Alta.

Sask.

Man.

Ont.

Income earned through a corporation

Corporate income

$1,000

$1,000

$1,000

$1,000

$1,000

Corporate tax

 (457)

 (447)

 (467)

 (467)

 (462)

After-tax amount

(A)

 543

 553 

 533 

 533 

 538 

Dividend refund

4

 267 

 267 

 267 

 267 

 267 

Available for distribution

 810

 820 

 800 

 800 

 805 

Personal tax of individual

 (308)

 (241)

 (279)

 (326)

 (323)

Net cash to individual

(B)$  502

$  579

$   521

$  474

$   482

Income earned directly by an individual

Personal income

$1,000

$1,000

$1,000

$1,000

$1,000

Personal tax

 (458)

 (390)

 (440)

 (464)

 (495)

Net cash to individual

(C)$  542

$  610

$   560

$  536

$   505

Summary

Tax savings (cost)

of incorporation

1

(B) – (C) $   (40)

$   (31)

$   (39)

$   (62)

$    (23)

Tax deferral

(pre-payment)

2

(A) – (C)$     1

$   (57)

$    (27)

$     (3)$     33

See the table "Integration—Cost and Benefit of Incorporation" and related notes on the 

following pages.

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