Should you set up a Canadian-Controlled Private Corporation (CCPC)?
What is a CCPC? CCPC stands for Canadian Controlled Private Corporation. The answer to whether or not you should set up a CCPC is if you want to take advantage of the following tax benefits that a CCPC is entitled to:
- First $500,000 of taxable income will be taxed as low as 9%.
- You may qualify for a lifetime capital gains exemption.
- One month extra to pay taxes.
Your first $500,000 of taxable income will be taxed at as low as 9%. This is a result of a small business deduction; without it you’ll incur taxes as high as 30%.
You may qualify for a lifetime capital gains exemption when you sell your company. That means if you have a capital gain of $892,000 you will pay 0 in taxes.
You may be entitled to one month extra to pay your taxes since the corporate tax deadline is three months after the end of its taxation year rather than the two months for personal taxes.