Quote:
Originally Posted by Azure
Tough call. I think its stupid that the money is technically being taxed twice, but on the other hand I like the fact that it can encourage the company to invest that money into other projects instead of paying it out to the shareholders.
But that is just me being an evil capitalist that wants companies to invest their money into building the economy.
On the other hand the shareholders deserve to make money too.
Is there double taxation of dividends in Canada? I know the US has it.
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Canada grosses up dividends to 125% (to approximate the corporation's pretax income) which goes in as taxable income on the personal tax return. Then a dividend tax credit is given to reduce taxes payable (which approximate's the corporate taxes paid/may have paid). This only applies to corporations that are resident in Canada.