3 Integration and the Small Business Deduction

Canadian Tax Fundamentals · 3:51

Listen on 93

Lyrics

[Verse 1]
When a corporation earns its pay
And shareholders want their share today
Without integration we would see
Double taxation hurting you and me
The company pays tax on what it makes
Then shareholders pay on what it takes
But Canada found a better way
To keep that double burden at bay

[Chorus]
Integration elimination, no double taxation
Five hundred thousand is the line, small business time
Section one-two-five will help you thrive
General rate reduction when your business is alive
Remember integration, avoid that double station
Tax law navigation through the Canadian nation

[Verse 2]
Small business deduction comes to play
On active income up to the day
You hit five hundred thousand in receipts
That's when the lower tax rate meets
Eleven and two-thirds percent off your bill
If your business qualifies still
Active business income gets the break
But passive income? That's a mistake

[Chorus]
Integration elimination, no double taxation
Five hundred thousand is the line, small business time
Section one-two-five will help you thrive
General rate reduction when your business is alive
Remember integration, avoid that double station
Tax law navigation through the Canadian nation

[Bridge]
Twenty-eighteen brought a grinding change
Passive income throws the range
Fifty thousand starts the slide
Your small business room will hide
Five dollars lost for every ten
Of passive income earned again

[Verse 3]
Tax on Split Income rules apply
Section one-two-zero point four, don't cry
TOSI stops the income splitting game
When family members try to claim
Reasonable return is the test they use
Or business involvement you can't refuse
Kiddie tax expanded past eighteen
Toughest anti-avoidance rules you've seen

[Chorus]
Integration elimination, no double taxation
Five hundred thousand is the line, small business time
Section one-two-five will help you thrive
General rate reduction when your business is alive
Remember integration, avoid that double station
Tax law navigation through the Canadian nation

[Outro]
From theory to practice, the system's designed
To keep double taxation confined
Small business thriving, integration driving
Canadian tax law surviving

← 1 Corporate Residency and Classification | 4 Corporate Distributions →