Corporate Tax Planning in Markham
Markham 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. Serving Markham virtually. 900+ five-star reviews.
AFFORDABLE Corporate Tax Planning for Markham Businesses
We serve Markham corporations from the Highway 7 tech corridor to Unionville Main Street, from Commerce Valley Drive to the Warden and Steeles industrial district. Markham is home to over 1,500 tech companies, Canada's largest concentration of life sciences firms and thousands of import/export businesses connected to the Pacific Rim. The corporate structures here are more complex than average: multi-entity tech groups, holding companies with real estate and investment portfolios, cross-border operations with US affiliates and family-owned restaurant and retail chains with associated corporation problems nobody has reviewed.
We build a written tax structure for every Markham client. Salary/dividend split calculated to the dollar. Passive income thresholds monitored quarterly. Holdco timing assessed before retained earnings accumulate past the danger zone. Associated corporation allocation reviewed across every related entity. Two mandatory reviews per year. No hourly billing. Fixed flat fee.
Book Free Consultation
Serving Markham Virtually
| Service | How We Deliver |
|---|---|
| Tax planning sessions | Video call (Zoom, Google Meet, Teams). Screen sharing for real-time review of financial statements, tax projections and salary/dividend scenarios. Recorded if you want to review later. |
| Document exchange | Secure client portal (TaxDome). Upload financial statements, T2 returns, corporate documents and CRA correspondence. Encrypted. Accessible from anywhere. |
| Ongoing communication | Phone (647-212-9559), email (info@gondaliyacpa.ca) and secure portal messaging. Same-day response on business days. No in-person visit required for any tax planning service. |
| Year-end review meetings | Two mandatory virtual sessions per year: mid-year review and pre-year-end review. Both conducted via video call. Written tax plan delivered after each session. |
| CRA correspondence and audit | We handle all CRA communication on your behalf remotely. Notices of assessment, review letters, audit requests and objections managed without requiring any in-person meeting. |
HQ: 168 Simcoe St Unit 1118, Toronto, ON M5H 4C9 · Phone: (647) 212-9559
Why Corporate Tax Planning Matters for Markham 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 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. | Associated corporation rules are reviewed. The SBD is allocated to the highest-income corporation. Unnecessary entities wound up or amalgamated. |
| Retained earnings accumulate with no extraction plan. Shareholder loans create section 15(2) benefit risks. | Retained earnings extracted through planned salary, dividends, capital dividends (CDA) and inter-company dividends. |
The Difference Between 12.2% and 26.5% on $500,000: A Markham 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. For a full overview, 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 Markham. |
| 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 Markham 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. | Markham 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, real estate income or interest income. Extremely common in Markham. |
| 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 share classes multiply the exemption. | Markham tech founders and 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. | Markham owners with multiple corporations. Common with tech company founders running separate product entities, real estate investors and restaurant chains. |
| 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 Markham corporate tax planning client. |
Markham Corporate Tax Planning: Real Client Results
SaaS Company, Commerce Valley Drive
A Markham SaaS company with $640,000 in active business income had two founders (50/50 shareholders) both taking 100% dividends. No RRSP room was being created. The company also had $78,000 in annual passive income from a GIC portfolio inside the operating corporation, silently eroding the SBD. We restructured: each founder took $70,000 in salary (creating $12,600 in RRSP room each), dividends covered the balance, the investment portfolio was transferred to a new holdco via tax-free inter-company dividends and the full SBD was restored.
Import/Export Business, Warden and Steeles
A Markham import/export company buying consumer electronics from Shenzhen and selling to Canadian retailers was operating through 3 associated corporations (importing entity, distribution entity, dormant holding company). The $500,000 SBD was split three ways. We wound up the dormant holdco, merged the distribution entity into the importing corporation and allocated the full SBD to the single operating company. The owner also had $52,000 in foreign exchange gains generating passive income. We implemented the annual sell-and-rebuy on the FX-denominated holdings.
Restaurant Chain, Highway 7 Corridor
A Markham restaurant owner operating 5 locations through 5 separate corporations was splitting the $500,000 SBD five ways. Combined active income: $1,100,000. We amalgamated 4 corporations into one operating entity, kept the highest-revenue location as a separate corporation with its own SBD allocation, established a holdco to receive retained earnings from both entities and issued non-voting shares to the spouse and two adult children for LCGE multiplication on a projected future sale.
Medical Specialist, Unionville
A Markham specialist physician earning $490,000 through a professional corporation had accumulated $620,000 in retained earnings invested in mutual funds inside the operating corporation. Annual passive income: $74,000. The SBD was reduced by $120,000 (the $24,000 excess above $50,000 multiplied by 5). We established a holdco, transferred the investment portfolio, implemented a 55/45 salary-dividend split (creating $49,500 in RRSP room) and restored the full SBD. An IPP was also established for an additional $13,000 in annual tax-deductible pension contributions.
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.
Markham 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 Markham 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. |
Industries We Serve for Corporate Tax Planning in Markham
Every Markham 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 Markham tech startups along Commerce Valley and Highway 7. Loss carry-forward management.
Corporate Tax Planning for Healthcare
Professional corporation structures for physicians, dentists and specialists across Markham. Salary vs dividend optimization. Family share allocation for LCGE multiplication.
Corporate Tax Planning for Consultants
Salary/dividend optimization for Markham IT, management and engineering consultants. International zero-rating for US clients. Holdco structures for high-income consultants.
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 the Highway 7 and Markham Road corridor. SBD allocation for restaurant groups. Holdco planning for operators accumulating retained earnings.
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 Markham manufacturers along the 404 and 407 corridors.
Corporate Tax Planning for Grocery Stores
Zero-rated basic grocery vs taxable prepared food. Inventory valuation. Multi-location SBD allocation for Markham grocery and specialty food retailers.
Corporate Tax Planning for Import & Export
Multi-currency income planning for Markham importers. Transfer pricing compliance for related non-resident suppliers. Cross-border entity structuring for Pacific Rim trade operations.
Frequently Asked Questions: Corporate Tax Planning in Markham
Meet Your Markham Tax Planning Experts
Your Markham 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 Markham clients. Specializes in SBD optimization, holdco structuring, LCGE planning for tech exits, passive income management and salary/dividend strategies for SaaS companies, import/export businesses and medical practices.
Vandana Goel, CPA
Senior CPA. Manages tax planning for Markham multi-entity tech groups, restaurant chains and professional corporations. Experienced in associated corporation analysis, GRIP/LRIP calculations, cross-border structuring and estate freeze planning.
What Markham Clients Say About Us
900+ five-star reviews from business owners across Markham, York Region and Ontario.
10 Advanced Tax Planning Strategies for Markham Businesses
1. Optimize the Salary-Dividend Mix Annually
The optimal salary/dividend split changes every year. A Markham SaaS founder who switched from 100% dividends to a 55/45 salary-dividend split created $49,500 in annual RRSP room, established CPP contribution history and reduced combined corporate and personal tax by $12,400. 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 Markham client. Tech companies with rapid revenue growth are particularly vulnerable to crossing the $500,000 threshold mid-year without realizing it.
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 Markham tech founders, the holdco is particularly important because it protects accumulated wealth from operating company risks: client lawsuits, contract disputes, IP claims and vendor litigation. If the operating company faces a judgment, the holdco's assets are separate and protected.
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 see this most frequently with Markham physicians and tech founders who reinvested profits inside the operating corporation for years without realizing the SBD was being eroded dollar for dollar.
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 Markham tech founder who issues non-voting shares to a spouse and two adult children creates four separate LCGE claims. On a $4.8 million sale, the combined exemption shelters the full gain. Markham's tech sector produces more business exits than almost any other Ontario market. We prepare LCGE eligibility for every client planning a sale within 10 years.
6. Maximize SR&ED Tax Credits
Markham has one of Canada's highest concentrations of SR&ED-eligible companies: SaaS development, hardware engineering, life sciences research, AI and machine learning, fintech and cybersecurity. Eligible CCPCs recover up to 35% of qualified SR&ED expenditures as a refundable credit. A Markham SaaS company with $120,000 in eligible developer salaries and cloud infrastructure costs recovered $42,000 as a refundable credit. 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 Markham client. Tech founders who sell a product line, patent or subsidiary often generate a capital gain without realizing the CDA exists and that half the gain can be distributed tax-free.
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 Markham SaaS companies and consulting firms where annual revenue varies significantly between strong contract years and transition 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 50-year-old Markham business owner can contribute $12,000 to $16,000 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
Markham business owners frequently operate multiple related entities: tech founders with separate corporations for each product line, import/export operators with buying and distribution entities, restaurant owners with one corporation per location and physicians with a professional corporation and a separate medical office holding company. Associated corporations share the $500,000 SBD. We review all relationships, allocate the SBD to the highest-income entity and evaluate whether amalgamation or restructuring would maximize the total tax benefit.
Markham Corporate Tax Planning. Written Tax Structure. Two Reviews Per Year.
Gondaliya CPA builds corporate tax plans for Markham businesses. SBD optimization, salary/dividend, holdco, LCGE, passive income. Serving Markham virtually. 900+ five-star reviews.