Integration—Cost and Benefit of Incorporation for Investment Income / 75
Que.
N.B.
N.S.
P.E.I.
Nfld.
Income earned through a corporation
Corporate income
$1,000
$1,000
$1,000
$1,000
$1,000
Corporate tax
(466)
(467)
(507)
(507)
(487)
After-tax amount
(A)
534
533
493
493
513
Dividend refund
4
267
267
247
247
257
Available for distribution
801
800
740
740
770
Personal tax of individual
(319)
(288)
(289)
(287)
(247)
Net cash to individual
(B)$ 482
$ 512
$ 451
$ 453
$ 523
Income earned directly by an individual
Personal income
$1,000
$1,000
$1,000
$1,000
$1,000
Personal tax
(500)
(468)
(500)
(474)
(423)
Net cash to individual
(C)$ 500
$ 532
$ 500
$ 526
$ 577
Summary
Tax savings (cost)
of incorporation
1
(B) – (C)$ (18)
$ (20)
$ (49)
$ (73)
$ (54)
Tax deferral
(pre-payment)
2
(A) – (C)$ 34
$ 1
$ (7)
$ (33)
$ (64)
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