Shareholder loans
It has become a common phenomenon that business owners simply obtain living funds from the company by taking advantage of their sole boss/director status. Or, let the company pay personal expenses, such as house decoration or visa invoices. Not willing to declare with personal income, it is a loan and will be repaid later. On the other hand, the defendant will pay the same fee in his own personal roaming. The difference between the two is that employees have paid personal taxes, annuities and employment insurance premiums before receiving net wages. Therefore, an average annual salary of 100000 won will bring a net salary of 60000 won. The owner can directly collect funds from the enterprise to bypass the source deduction and obtain 100 thousand dollars in full. According to the CRA rules, in short, if the company’s net income is 250000 won, and then pays 100000 won of wages, the net income is 150000 won, and 150000 won of taxes need to be paid (16.5% for small businesses in Ontario). Moreover, people with a monthly salary of 100000 won need to pay personal income tax. (more than 40-45%), which is exactly what ordinary business owners do not want. For the same reason, the Canada Revenue Service has focused on developing sound laws and regulations to implement tax laws in this area.
In particular, Section 15 of the Income Tax Act (ITA) outlines the CRA’s position on advances to shareholders/directors. The idea is that all benefits provided by the company to shareholders/directors should be included in taxable income. S. 15 (2) relevant “; shareholder debt”; It means that all persons related to shareholders or shareholders have obtained loans “; the amount of loans or debts includes the calculation of a person’s income in the current year……”;
However, in Article 15 (2.6), the Ministry states that the above provisions do not apply to the following situations: Loans or debts repaid by the borrower within one year after the end of the tax year…… “;”; If you can see… Repayment is not part of a series of loans or other transactions and repayments. ”
Loan for house purchase
Your company can provide a housing loan allowed by CRA with a loan term of 5 years, and you can choose to extend it. Must be 0. Only for the purpose of obtaining the right of residence
(a) Loans or debts obtained by individuals due to their positions or businesses
(b) A designated shareholder of the Company who has made loans or incurred debts due to his services,
(c) A person described in (a) or (b) in relation to a person… “;
Therefore, you must actively serve the company as an employee or shareholder.
The loan must bear interest, and its principal need not be included in personal income, and the amount shall not exceed the amount actually paid for the purchase of the house in the current year. S、 80.4（1）；80.4(7). The loan term shall not exceed five years. Provisions “; Interest must be paid.
You can also use the car purchase loan option. If it is not because of holding stocks, but because of employment.
