In the past many people would just accept their tax obligation as a part of life’s living expenses and file their returns as required by law. Now with a tough economy more people are being forced to take a closer look at their tax situation, and are becoming more knowledgeable in way to reduce this expense where possible.
For this reason a lot of people are choosing to rely on experts who know what tax incentives can be taken advantage of to help reduce an individual’s tax debt, and these are often the professional Toronto accountants.
Another aspect that some people are starting to consider is if there are some areas better to live in regarding their tax situation. While the Federal tax will have implications for any tax payer no matter where they live in Canada, the Provincial taxes may be a different story.
Geographical tax implications are usually more of an interest to those who own and operate a business. The provinces are well aware of this and will try and offer business tax incentives in order to draw more industries to their area, which in turn helps their economy.
On the surface you may discover that a particular province is going to offer you a much better tax rate for your business, but you need to look deeper than this.
First you have to determine that although the tax rate may be lower what tax incentives does the province also offer to encourage you to bring your business there, and how stable is the tax rate you are looking at now going to be in the future? For example, the Province of New Brunswick introduced a lower business tax rate in 2012 from 5% to 4.5%. Then in July of 2013 it raised the Corporation tax rate from 10% to 12% for businesses whose income didn’t qualify for the lower rates.
What you have to be careful of is making your tax decisions based on the current information, but also the expectations that you will have for your business in a new Province. You need to do a thorough analysis of how the business will fare here, as well as what would be the tax implications according to the growth of the business.
All of this comes under the scope of tax planning, and how aggressive you want to be with this type of tax undertaking. You have to think about the current implications as well as do some forecasting for the future. As a current Ontario business owner it would be well worth seeking out the advice of a quality accountant like Sam Seidman, who is very pro-active in helping Ontario tax payers make good tax decisions.
