RSM Richter confirms Canada will adopt a corporate tax rate of 25% by 2014
TORONTO, Dec. 14 /CNW/ - As we head into 2011, private owner-managed businesses will continue to benefit from Canada's low corporate tax rates—the lowest among G7 countries. RSM Richter says this will bring Canada on par with emerging countries including China.
"The new year will bode well for Canada to see foreign investment, particularly from the US. Businesses will look to profit from our competitive corporate tax structure and take advantage of Canada's labour costs, which are also the lowest among G7 countries," said David Steinberg, co-managing partner of RSM Richter.
While the recession continues to negatively impact the bottom line for most businesses, Canada's corporate tax structure will have a positive impact on international investment.
Top Three Trends in 2011 for private owner-managed businesses:
Canada will be one of the lowest tax jurisdictions in the world
While personal taxes remain high in Canada, Canada's corporate tax rates continue to decline. By 2014, Canada will enjoy a 25 per cent tax rate across most provinces making it one of the lowest rates among the G20 countries.
Foreign entities will enjoy a simplified corporate tax system in Canada
The Canadian government is considering a new tax policy that will allow businesses under common control to file taxes as one entity. (Currently, each entity under the same corporate umbrella must file separate tax returns.) This new policy will have the broadest implications for businesses that may have losses in some entities and profits in others. Companies will have the ability to save tax and simplify filing within one tax structure.
Manufacturers will look within their own borders for supply and demand
Although China continues to dominate in the manufacturing sector, it will no longer have the clout it once did. China's corporate "tax holiday" of 15 per cent is over, now sitting at 25 per cent. China is also challenged by domestic supply and demand issues. As a result, other emerging nations such as India and Vietnam and even developed nations such as Canada may become more attractive to manufacturers.
While businesses continue to be concerned about Canada's rising dollar and the effect it has on their operations, RSM Richter believes that this impact will be offset by Canada's low corporate tax rate and stable economy. "We will see a lot of international business, particularly private US equity firms, looking to invest in Canada and set up shop despite the rising loonie," said Steinberg.
About RSM Richter and RSM Richter Chamberland
Entrepreneurs have been the focus of our firm since it was founded in 1926. Today, RSM Richter, known as RSM Richter Chamberland in Montreal, is the ninth largest independent accounting, business advisory and consulting firm in Canada. RSM Richter offers a full range of advisory and consulting services, supported by in-depth industry knowledge and national and international experience. Strategically located in Calgary, Toronto and Montreal, RSM Richter and RSM Richter Chamberland are part of a strong international affiliation covering all major markets around the globe. RSM International is the 6th largest network of independent accounting and consulting firms in the world operating from 736 offices in 76 countries. For more information, please visit www.rsmrichter.com.
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