Simple Canadian Corporate Tax Question.

Factual Questions
1

Hypothetical situation.

Ok, let’s say, as an individual, I make an advertising business deal with a Canadian corporation.

Being unincorporated myself, and since I don’t want any monies received to be classed as personal, taxable income, I decide to quickly incorporate in Canada so that I can receive the fees and tax advantages thereof.

My question is this.

Let’s say, for round number’s sake, the Corporation A “the Buyer” wires to newly-minted Corporation B “the seller” of said advertising services; $1,000,000.

How much TOTAL corporate tax would need to be paid to the CCRA (provinical - Province of BC and federal.)

I have looked this up online, but get conflicting and confusing amounts.

My friend says a person would only have to pay about 15% tax in total… which I can’t seem to confirm.

~Libre

2

Ok, I got a rough answer for this:

First $400k - taxed at 13.5% (that covers federal and provincial tax.)
The remaining $600k would be taxed at about 30% - (which also covers fed & prov tax.)

So the tax bill would be roughly = $234,000 (actually it will be somewhat less, but this is good enough for a back of the envelope calculation.)

~Libre