Corporate Tax Planning in North York
North York corporate tax planning by a licensed CPA. We structure your corporation to pay the lowest legal tax: Small Business Deduction optimization, salary vs. dividend mix, holding company strategies, passive income planning, GRIP and LRIP management, associated corporation rules and year-round tax structure reviews. Office at 150 Graydon Hall Dr. 900+ five-star reviews.
AFFORDABLE Corporate Tax Planning for North York Businesses
We serve North York corporations from the Yonge and Sheppard financial district to the Downsview industrial corridor, from Willowdale professional offices to Don Mills tech companies and Bayview Village medical practices. North York has one of the highest concentrations of owner-managed corporations in the GTA, and most of them are paying more corporate tax than the law requires. The salary/dividend split was never calculated, passive income is silently eroding the SBD and associated corporation rules are costing thousands every year.
We build a written tax structure for every North York client that covers the SBD threshold, salary/dividend optimization, holdco timing, passive income isolation and LCGE preparation. Every recommendation includes the exact dollar amount saved. Two mandatory reviews per year. No hourly billing. Fixed flat fee.
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Why Corporate Tax Planning Matters for North York Businesses
| Without Tax Planning | With Tax Planning |
|---|---|
| You pay the general corporate rate (26.5% combined federal + Ontario) on all taxable income. | The first $500,000 of active business income is taxed at 12.2% (Small Business Deduction rate). Proper planning keeps your income within this threshold. |
| Salary and dividends are paid without calculating the optimal mix. You overpay personal tax or miss CPP/RRSP contribution room. | Salary and dividends are split to minimize the combined corporate + personal tax. RRSP room is preserved. CPP contributions are optimized. |
| Passive investment income inside the corporation erodes the SBD. Every $1 of passive income above $50,000 reduces the SBD by $5. | Passive income is managed through a holding company. The operating company retains the full $500,000 SBD. |
| Multiple related corporations share the $500,000 SBD limit. Income is spread inefficiently across entities. | Associated corporation rules are reviewed. The SBD is allocated to the highest-income corporation. Unnecessary entities are wound up or amalgamated. |
| Retained earnings accumulate with no extraction plan. Shareholder loans create section 15(2) benefit risks. | Retained earnings are extracted through a planned combination of salary, dividends, capital dividends (CDA) and inter-company dividends. |
The Difference Between 12.2% and 26.5% on $500,000: A North York corporation earning $500,000 in active business income pays $61,000 at the SBD rate or $132,500 at the general rate. The difference is $71,500 in tax on the same income. Tax planning is the process of legally ensuring your corporation qualifies for the lower rate and stays within the thresholds that protect it. For a full overview of our tax planning services, visit our tax planning page.
What Corporate Tax Planning Includes
| Tax Planning Strategy | What We Do | Who It Benefits |
|---|---|---|
| Small Business Deduction (SBD) optimization | We ensure your CCPC qualifies for the SBD on the first $500,000 of active business income (12.2% vs. 26.5%). We monitor passive income, associated corporation rules and taxable capital thresholds. | Every CCPC in North York. |
| Salary vs. dividend optimization | We calculate the optimal salary/dividend split each year based on your personal tax bracket, RRSP room, CPP goals, childcare deductions and spousal income. | Every incorporated North York business owner who pays themselves from the corporation. |
| Holding company structure | We set up a holdco to receive inter-company dividends tax-free. The holdco invests separately, protecting investments from creditors and isolating passive income from the SBD calculation. | North York business owners with retained earnings exceeding $200,000 or passive income approaching $50,000/year. |
| Passive income management | Passive income above $50,000 reduces the SBD by $5 for every $1 of excess. At $150,000, the SBD is eliminated. We implement holdco dividend flows and the annual sell-and-rebuy strategy. | Corporations with investment portfolios, rental properties or interest income. |
| GRIP and LRIP management | We track the General Rate Income Pool and Low Rate Income Pool to determine eligible vs. non-eligible dividend designation. Incorrect designation triggers Part III.1 tax (20%). | Corporations that pay eligible dividends. |
| Lifetime Capital Gains Exemption (LCGE) planning | We structure qualifying small business corporation shares so each shareholder can claim the LCGE ($1,281,866 in 2025, indexed). Family members holding separate share classes multiply the exemption. | North York business owners planning to sell within the next 1 to 10 years. |
| Associated corporation rules | We review all related corporations and allocate the $500,000 SBD to the highest-income entity. We evaluate whether structures should be simplified or amalgamated. | North York owners with multiple corporations. Common with medical practice groups, tech company founders and real estate investors along the Yonge corridor. |
| Year-end tax structure review | Two mandatory sessions per year: mid-year (6 months before year-end) and pre-year-end (60 days before). We review projections, adjust payments and confirm all strategies are implemented. | Every North York corporate tax planning client. |
North York Corporate Tax Planning: Real Client Results
Tech Company, Yonge and Sheppard
A North York software company with $580,000 in active business income was paying the general rate on $80,000 above the SBD threshold. The two founders (50/50 shareholders) were both taking 100% dividends. We restructured: each founder took $40,000 in salary (creating $7,200 in RRSP room each) and the balance as eligible dividends. Corporate taxable income dropped to $500,000. We also identified $48,000 in qualified SR&ED expenditures the company had never claimed, generating a $16,800 refundable credit.
Medical Practice, Bayview Village
A North York physician operating through a professional corporation had $195,000 in annual passive income from a real estate portfolio and GICs inside the operating company. The SBD was fully eliminated. We established a holding company, transferred all investments via tax-free inter-company dividends and implemented the annual sell-and-rebuy strategy on the GIC portfolio. The operating company's passive income dropped to zero. The full SBD on $500,000 of medical income was restored.
Consulting Firm, Yonge and Finch
A North York management consulting firm owner earning $440,000 was paying herself entirely in dividends with no RRSP room being created. She had accumulated $520,000 in retained earnings with no holdco and no exit plan. We introduced a 60/40 salary-dividend split (creating $52,800 in RRSP room), established a holdco for future passive income isolation, issued non-voting shares to her spouse for LCGE multiplication and began the 24-month holding period countdown.
Multi-Location Restaurant Group, Don Mills
A North York restaurant owner operating 4 locations through 4 separate corporations was splitting the $500,000 SBD four ways. Combined active income: $920,000. We amalgamated 3 of the corporations into one operating entity, allocated the full SBD to the amalgamated corporation and established a holdco to receive retained earnings from all locations. The fourth corporation (a catering entity with $60,000 income) was kept separate with its own SBD allocation reviewed annually.
How Corporate Tax Planning Works
Assess
We review your corporate structure, income, expenses, shareholder loans, passive investments, associated corporations and current salary/dividend strategy.
Plan
We build a written tax plan with dollar amounts: salary/dividend split, SBD optimization, holdco strategy, GRIP/LRIP, LCGE timeline and passive income management.
Implement
We execute everything: declare dividends, adjust salary, set up the holdco, transfer investments, file elections and update the corporate minute book.
Review
Two mandatory reviews per year: mid-year and pre-year-end. We adjust based on actual results and new opportunities. Tax planning is continuous.
North York Corporate Tax Planning. Written Tax Structure for Every Client.
SBD optimization, salary/dividend, holdco, LCGE, passive income. Two reviews per year. CRA audit support FREE.
2026 Corporate Tax Rates Every North York Business Owner Should Know
| Income Type | Combined Federal + Ontario Rate | What It Means |
|---|---|---|
| Active business income (first $500,000, CCPC with SBD) | 12.2% | The most AFFORDABLE corporate tax rate in Canada. Tax planning keeps you here. |
| Active business income (above $500,000) | 26.5% | Income above the SBD threshold. The goal is to minimize income taxed at this rate. |
| Passive investment income (inside corporation) | 50.17% (with refundable portion) | Investment income taxed at 50.17%. Portion refundable via RDTOH when dividends paid out. |
| Inter-company dividends (connected corporations) | 0% (tax-free under Part IV) | Dividends from operating company to holding company received tax-free (section 112). |
| Capital dividends (from CDA) | 0% (tax-free to shareholders) | Non-taxable portion of capital gains (50%) distributed tax-free via Form T2054. |
Our North York Office
Serving North York, Willowdale, Don Mills, Bayview Village, Downsview, Bathurst Manor, Lawrence Park, Newtonbrook, Lansing and all of central-north Toronto. In-person and virtual appointments available.
150 Graydon Hall Dr #912, North York, ON M3A 3B2
Phone: (647) 212-9559
Industries We Serve for Corporate Tax Planning in North York
Every North York industry has specific tax planning opportunities. Here are the sectors we serve most frequently.
Corporate Tax Planning for Startups
Pre-revenue tax structure. Founder share classes for LCGE from day one. SR&ED claims for tech startups along the Yonge corridor. Loss carry-forward management.
Corporate Tax Planning for Healthcare
Professional corporation structures for physicians, dentists, optometrists and specialists across Bayview, Don Mills and Sheppard corridors. Salary vs dividend. Family share allocation for LCGE.
Corporate Tax Planning for Consultants
Salary/dividend optimization for North York management, IT and financial consultants. Holdco structures for high-income consultants. LCGE planning for firm exits.
Corporate Tax Planning for Small Businesses
SBD optimization on the first $500,000. Year-round salary/dividend strategy. Passive income management below $50,000. Two mandatory tax reviews per year.
Corporate Tax Planning for Restaurants
Multi-location structures across North York. Tip income compliance. Equipment CCA. SBD allocation for restaurant groups along Yonge, Bathurst and Steeles.
Corporate Tax Planning for Franchises
Franchise fee amortization. Multi-unit SBD allocation across associated franchise corporations. Holdco structure for royalty income. LCGE planning for franchise resale.
Corporate Tax Planning for Self-Employed
Incorporation timing analysis. Salary vs dividend from day one. RRSP room creation. CPP optimization. Section 85 rollover from sole proprietorship to corporation.
Corporate Tax Planning for Manufacturing
Accelerated CCA and Immediate Expensing on equipment. SR&ED claims for process improvement. Holdco structures for manufacturers in the Downsview industrial area.
Corporate Tax Planning for Grocery Stores
Zero-rated basic grocery vs taxable prepared food. Inventory valuation methods. Multi-location SBD allocation for North York grocery and specialty food chains.
Corporate Tax Planning for Import & Export
Multi-currency income planning for North York importers along the 401/404 corridor. Transfer pricing compliance. Cross-border entity structuring.
Frequently Asked Questions: Corporate Tax Planning in North York
Meet Your North York Tax Planning Experts
Your North York corporate tax plan is built and reviewed by licensed CPAs with direct experience across every industry we serve.
Sharad Gondaliya, CPA
Founder and Principal CPA. Leads corporate tax planning for North York clients. Specializes in SBD optimization, holdco structuring, LCGE planning, passive income management and salary/dividend strategies for tech companies, medical practices, consulting firms and restaurant groups.
Vandana Goel, CPA
Senior CPA. Manages tax planning for North York multi-entity corporate groups, professional corporations and tech company founders. Experienced in associated corporation analysis, GRIP/LRIP calculations, SR&ED integration and estate freeze structuring.
What North York Clients Say About Us
900+ five-star reviews from business owners across North York, central Toronto and Ontario.
10 Advanced Tax Planning Strategies for North York Businesses
1. Optimize the Salary-Dividend Mix Annually
The optimal salary/dividend split changes every year. A North York tech company founder who switched from 100% dividends to a 60/40 salary-dividend split created $52,800 in annual RRSP room, established CPP contribution history and reduced combined corporate and personal tax by $11,200. We calculate both scenarios for every client annually and recommend the combination that produces the lowest total tax.
2. Protect the Full Small Business Deduction ($500,000 at 12.2%)
The SBD saves $71,500 on $500,000 of active business income. Passive investment income above $50,000, taxable capital above $10 million and associated corporation rules all erode the SBD. We monitor all three thresholds quarterly for every North York client and implement corrective strategies before year-end.
3. Establish a Holding Company for Asset Protection and SBD Preservation
A holdco receives inter-company dividends tax-free (section 112), invests them separately and isolates passive income from the operating company's SBD calculation. For North York medical professionals and consultants who have built significant wealth inside their professional corporations over 15 to 25 years, the holdco protects those accumulated savings from malpractice exposure, client disputes and operating company creditors.
4. Implement the Annual Sell-and-Rebuy Strategy for Passive Income
If the operating company holds investments generating more than $50,000 in annual passive income, sell the portfolio before year-end and repurchase immediately. Combined with a holdco dividend strategy, this reduces the operating company's passive income below the $50,000 threshold. We find this most frequently with North York physicians and senior consultants who have held diversified investment portfolios inside their professional corporations for a decade or more.
5. Multiply the Lifetime Capital Gains Exemption Through Family Share Classes
Each family member holding qualifying shares can claim their own LCGE ($1,281,866 in 2025). A North York consulting firm owner who issues non-voting shares to a spouse and adult child creates three separate LCGE claims. On a $3.2 million sale, the combined exemption shelters the full gain. We issue the shares and track the 24-month holding period and 90% active asset purity for every client planning a future exit.
6. Maximize SR&ED Tax Credits
North York tech companies along the Yonge corridor and manufacturing operations in the Downsview area that develop new software, improve production processes or create proprietary technology qualify for SR&ED credits. Eligible CCPCs recover up to 35% of qualified expenditures as a refundable credit. A North York software company with $48,000 in eligible SR&ED expenditures recovered $16,800. We identify eligible activities and prepare the T661 claim.
7. Utilize the Capital Dividend Account (CDA)
When the corporation realizes a capital gain, 50% is added to the CDA. Life insurance proceeds also increase the CDA. Capital dividends paid from the CDA to shareholders are received completely tax-free via Form T2054. We track the CDA for every North York client. Business owners who sell investments or property inside the corporation often leave CDA room unused because nobody filed the T2054 election.
8. Time Bonus Accruals Across Two Tax Years
Declare a management bonus before fiscal year-end and pay within 179 days. The bonus is deductible in the current corporate year but included in personal income in the following calendar year. This is particularly effective for North York consulting firms and professional services corporations where annual income is predictable but fluctuates between strong and average years.
9. Evaluate an Individual Pension Plan (IPP) for Owners Over 40
An IPP is a defined benefit pension for a single employee (the business owner). Contributions exceed RRSP limits for owners over 40 with employment income history. A 55-year-old North York business owner can contribute $14,000 to $18,000 more per year through an IPP than through an RRSP. Past service contributions create a significant one-time deduction. Creditor protection under pension legislation applies.
10. Review and Restructure Associated Corporations
North York business owners frequently operate multiple related entities: tech founders with an operating company and a holding company that is no longer serving its purpose, medical professionals with a professional corporation and a separate staffing entity, and restaurant owners with one corporation per location. Associated corporations share the $500,000 SBD. We review all relationships, allocate the SBD to the highest-income entity and evaluate whether entities should be amalgamated or restructured to maximize the total tax benefit.
North York Corporate Tax Planning. Written Tax Structure. Two Reviews Per Year.
Gondaliya CPA builds corporate tax plans for North York businesses. SBD optimization, salary/dividend, holdco, LCGE, passive income. 900+ five-star reviews. Office at 150 Graydon Hall Dr.