Corporate Tax Planning in Ottawa
Ottawa 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 2090 Neepawa Ave. 900+ five-star reviews.
AFFORDABLE Corporate Tax Planning for Ottawa Businesses
We serve Ottawa corporations from Kanata North's technology park to Centretown's professional services firms, from Gloucester and Orleans to Nepean, Barrhaven and the Byward Market. Ottawa's economy runs on two engines: government contracting and technology. Both produce owner-managed corporations with high retained earnings, complex salary/dividend decisions, passive income building inside the operating company and associated corporation problems that nobody has reviewed. The salary/dividend split for a Kanata tech founder is a completely different calculation than the one for a Centretown government consultant, and both are different from the restaurant owner on Bank Street.
We build a written tax structure for every Ottawa client. Salary/dividend split optimized to the dollar. Passive income thresholds tracked quarterly. Holdco established before the $50,000 threshold costs you the SBD. Associated corporation allocation reviewed across every related entity. Two mandatory reviews per year. No hourly billing. Fixed flat fee.
Book Free Consultation
Why Corporate Tax Planning Matters for Ottawa 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. |
| 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: An Ottawa 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. 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 Ottawa. |
| 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 Ottawa business owner. |
| Holding company structure | We set up a holdco to receive inter-company dividends tax-free, invest separately and isolate passive income from the SBD calculation. | Ottawa 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. Extremely common with established Ottawa consultants and tech founders. |
| GRIP and LRIP management | We track GRIP and LRIP 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 shares so each shareholder can claim the LCGE ($1,281,866 in 2025, indexed). Family share classes multiply the exemption. | Ottawa 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. | Ottawa owners with multiple corporations. Common with government consultants running separate entities per contract stream, tech founders with product and services corporations and multi-location restaurant operators. |
| Year-end tax structure review | Two mandatory sessions per year: mid-year and pre-year-end. Projections reviewed, payments adjusted, strategies confirmed. | Every Ottawa corporate tax planning client. |
Ottawa Corporate Tax Planning: Real Client Results
Government IT Consultant, Centretown
An Ottawa government IT consultant earning $480,000 through a professional corporation had been paying himself 100% in dividends for 9 years. No RRSP room was being created. The corporation held $540,000 in retained earnings invested in a GIC ladder and mutual funds generating $72,000 in annual passive income. The SBD was reduced by $110,000. We established a holdco, transferred the entire investment portfolio via tax-free inter-company dividends, introduced a 55/45 salary-dividend split creating $47,700 in annual RRSP room and restored the full SBD on the consulting income.
Cybersecurity Company, Kanata North
A Kanata cybersecurity company with $680,000 in active business income had two founders (60/40 shareholders) both taking 100% dividends. The corporation had never claimed SR&ED credits on $145,000 in eligible R&D expenditures. We restructured: each founder took an optimized salary/dividend mix (creating $15,600 and $10,400 in RRSP room respectively), established a holdco for future passive income isolation and identified 3 years of unclaimed SR&ED. The current-year T661 generated a $50,750 refundable credit. Prior-year amendments recovered an additional $38,200.
Multi-Location Restaurant Group, Byward Market
An Ottawa restaurant owner operating 3 locations through 3 separate corporations was splitting the $500,000 SBD three ways. Combined active income: $860,000. We amalgamated all 3 corporations into one operating entity, allocated the full SBD and established a holdco to receive retained earnings. The owner issued non-voting shares to the spouse and adult daughter for LCGE multiplication. On a projected $2.6 million sale in 5 years, three LCGE claims shelter the full gain.
Defence Consulting Firm, Nepean
An Ottawa defence consulting firm with 2 associated corporations (one for government contracts, one for commercial work) was splitting the $500,000 SBD. The government contract corporation earned $390,000 and the commercial corporation earned $180,000. We allocated the full SBD to the government entity, evaluated the commercial entity's income against the general rate and determined amalgamation was optimal. Combined entity now receives the full SBD. The owner also had $58,000 in passive rental income inside the operating company. We transferred the rental property to a new holdco.
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. Tax planning is continuous.
Ottawa 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 Ottawa 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. 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 Ottawa Office
Serving Ottawa, Kanata, Nepean, Barrhaven, Gloucester, Orleans, Centretown, the Glebe, Westboro, Stittsville and all of the National Capital Region. In-person and virtual appointments available.
2090 Neepawa Ave a314, Ottawa, ON K2A 3L6
Phone: (647) 212-9559
Industries We Serve for Corporate Tax Planning in Ottawa
Every Ottawa 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 Ottawa tech startups in Kanata North and Centretown. Loss carry-forward management.
Corporate Tax Planning for Healthcare
Professional corporation structures for physicians, dentists, optometrists and specialists across Ottawa. Salary vs dividend optimization. Family share allocation for LCGE multiplication.
Corporate Tax Planning for Consultants
Salary/dividend optimization for Ottawa government consultants, IT consultants and management advisory firms. 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 Ottawa, the Byward Market, Bank Street and Elgin Street. 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 Ottawa manufacturers and defence technology suppliers.
Corporate Tax Planning for Grocery Stores
Zero-rated basic grocery vs taxable prepared food. Inventory valuation. Multi-location SBD allocation for Ottawa grocery and specialty food retailers.
Corporate Tax Planning for Import & Export
Multi-currency income planning. Transfer pricing compliance. Cross-border entity structuring for Ottawa businesses with US government and commercial contracts.
Frequently Asked Questions: Corporate Tax Planning in Ottawa
Meet Your Ottawa Tax Planning Experts
Your Ottawa 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 Ottawa clients. Specializes in SBD optimization, holdco structuring, LCGE planning, passive income management and salary/dividend strategies for government consultants, cybersecurity firms, defence contractors and restaurant groups.
Vandana Goel, CPA
Senior CPA. Manages tax planning for Ottawa multi-entity consulting groups, professional corporations, tech companies and family-owned businesses. Experienced in associated corporation analysis, GRIP/LRIP calculations, SR&ED integration and estate freeze structuring.
What Ottawa Clients Say About Us
900+ five-star reviews from business owners across Ottawa, the National Capital Region and Ontario.
10 Advanced Tax Planning Strategies for Ottawa Businesses
1. Optimize the Salary-Dividend Mix Annually
The optimal salary/dividend split changes every year. An Ottawa government IT consultant who switched from 100% dividends to a 55/45 salary-dividend split created $47,700 in annual RRSP room after 9 years of zero contributions, established CPP contribution history and reduced combined corporate and personal tax by $10,600. We calculate both scenarios for every client annually.
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. Ottawa government consultants and tech founders with long careers and accumulated investment portfolios are the most vulnerable because passive income builds gradually over years without any visible warning until the T2 is filed.
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 SBD. For Ottawa government consultants, the holdco protects accumulated wealth from contract disputes, performance bond claims and indemnification obligations in federal contracts. For tech founders, the holdco shields investments from operating company risks: client lawsuits, IP disputes and vendor claims.
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 Ottawa consultants who built GIC ladders and diversified portfolios inside their professional corporations over 10 to 15 years of government contracting.
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 Kanata tech founder who issues non-voting shares to a spouse and adult child creates three separate LCGE claims. On a $3.6 million sale, the combined exemption shelters the full gain. Ottawa's technology sector produces frequent acquisitions and exits. We prepare LCGE eligibility for every Ottawa client planning a sale within 10 years.
6. Maximize SR&ED Tax Credits
Ottawa has one of Canada's highest concentrations of SR&ED-eligible companies: cybersecurity, defence technology, telecommunications, SaaS, photonics and clean technology. Eligible CCPCs recover up to 35% of qualified expenditures as a refundable credit. A Kanata cybersecurity company with $145,000 in eligible R&D salaries and infrastructure costs recovered $50,750 in the current year and $38,200 in prior-year amendments. 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 Ottawa client. Tech founders who sell a product line, patent or division often generate capital gains 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 Ottawa government consultants whose income is tied to fiscal year contract cycles (April to March) that do not align with their corporate fiscal year-end.
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 52-year-old Ottawa business owner can contribute $13,000 to $17,000 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
Ottawa business owners frequently operate multiple related entities: government consultants with separate corporations per contract stream or security clearance level, tech founders with product and services corporations, defence contractors with a civilian and a classified 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 amalgamation or restructuring would maximize the total tax benefit.
Ottawa Corporate Tax Planning. Written Tax Structure. Two Reviews Per Year.
Gondaliya CPA builds corporate tax plans for Ottawa businesses. SBD optimization, salary/dividend, holdco, LCGE, passive income. 900+ five-star reviews. Office at 2090 Neepawa Ave.