9.3 What are the similarities and differences between the various types of corporations (private, CCPC, public). (6.2.1)

Jessica Thao

The status of a corporation, whether it’s private, public, or a Canadian-controlled private corporation (CCPC), will affect the tax treatment of its shareholders and the corporation itself.  The similarities and differences are shown below:

CCPC

Other Private corporation

Public corporation

Definition
  • Private corporation
  • Not controlled by a non-resident
  • Private corporation
  • May be controlled by a non-resident
  • Corporation listed on a public stock exchange

Net tax rate

(corporate tax rates)
  • 9% Active Business Income (ABI) <= Small Business Deduction (SBD)
  • 15% for other ABI
  • 38.67% for investment income

15%

15%

Eligible for RDTOH

Yes (CRA ‘refundable dividend tax on hand)

No

Additional refundable tax

Yes, on passive income

No

No

Small business deduction

 Yes, for ABI up to the $500K SBD threshold. No

No

Other tax benefit

– Enhanced investment tax credits

– Capital gain exemption for shareholders on the sale of shares

– Research & development tax credit

No

No

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Author: Emily Yeung, January 2020

References and Resources

“What are the similarities and differences between the various types of corporations (private, CCPC, public). (6.2.1)” from Intermediate Canadian Tax Copyright © 2021 by Jessica Thao is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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9.3 What are the similarities and differences between the various types of corporations (private, CCPC, public). (6.2.1) Copyright © 2021 by Jessica Thao is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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