Federal and Provincial Income Tax Rates
This discussion focuses on resident and non-resident Canadian corporations. The 2011 combined federal and provincial corporate income tax rates on taxable business income allocable to a permanent establishment in a province generally range between 26.5% to 32.5% (a lower rate of tax is available on a portion of the taxable active business income earned by Canadian-controlled private corporations). Based on the present provisions of the Act, the tax rate will be reduced by 1% in 2012.
It should be noted that Canada does not permit corporations to use consolidation in determining their taxable income. In other words, each entity must determine its own taxable income (or losses) and is subject to tax on this basis. Therefore, losses of one corporation cannot offset the profit of a related corporation. However, in the 2010 federal budget, the government announced that it was seriously considering a change to the Canadian tax system which would permit consolidation.
Additional posts from the blog
The Autorité des marchés financiers Proposes An Alternative Approach to Securities Regulators Intervention in Defensive Tactics
On March 14, 2013, the Autorité des marchés financiers (“AMF”) published for comments a consultation paper (the “AMF Proposal”) pertaining to defensive tactics in response to take-over bids. This consultation is taking place concurrently with the one launched the same day by the Canadian Securities Administrator (“CSA”) with the release of proposed National Instrument 62-105 Security Holder Rights Plans and proposed Companion Policy 62-105CP Security Holder Rights Plans (collectively, “62-105”). Unlike the CSA’s 62-105, the AMF Proposal addresses all defensive tacticsii, not only security holders rights plans.
The Canadian Securities Administrators published for comment a proposed new regulatory framework for rights plans under proposed National Instrument 62-105 Security Holder Rights Plans and proposed Companion Policy 62-105CP Security Holder Rights Plans (collectively, “62-105”). If adopted, 62-105 would provide issuers with a game changing tool to respond to hostile take-over bids, where a target board will be able to use a rights plan as leverage to negotiate with a potential bidder.
In this presentation, Dentons' Ralph Shay, Bill Gilliland and Adrienne O’Reilly discuss recent trends in Mergers and Acquisitions.