One of the great things about starting and operating a business in Canada are the considerable potential tax benefits.
There are lots of ways to lawfully reduce the tax burden … both in terms of the taxes you pay on corporate income as you start and grow your business and in terms of the taxes you pay when you sell your business (especially the shares of your business).
As a corporate lawyer, I have learned that taxes are EVERYWHERE and follow you with each and every step you take in starting, growing and selling your business.
Anytime income is received, expenses are incurred, assets are purchased or assets are sold … and regardless of the dollar amounts involved … some tax rule shows up which can, if you let it, chip away at your best efforts to earn an income and build wealth.
In percentage terms, taxes represent one of the most significant “costs” you will incur in operating and/or selling your business … but ironically … this is a cost frequently ignored by many of my clients.
Some either “accept” taxes as part of their business environment while others simply don’t pay close enough attention until taxes start to take a large enough bite out of their incomes or sale proceeds.
Do yourself and your business a favour … spend some time with your accountant or other tax advisor to understand the legal steps you can take now to lower your corporate and personal income tax burden and to also lower the taxes you will pay eventually once you sell your business.
The time you spend with your accountant or other tax advisor should be viewed as an “investment” not an “expense” as, invariably, the amount of tax savings available to you (both in the current and future years) will significantly exceed the cost of the advice you get. The numbers “work” really well!
Also, it will serve you very well to get into the mindset of “TAXES EVERYWHERE“.
By this I mean that you should accept that tax implications arise in all sorts of ways which are very often NEITHER logical nor intuitive.
Again, if you are spending money, receiving money or buying or selling anything, there is likely some tax implication that, with a bit of planning, can be eliminated or mitigated.
