Can I invest incorporation money in other countries?

[Sigma]

Hello,
I have incorp n make about 100k in profits. I have no immediate use for money to draw dividends or sal. Can I invest this money in GICs from other countries that give higher returns.

If I can, then will 100k still be regarded as profits at end of tax year, or as a investment? How much tax do incorp pay for money earned in interest/dividends?

Thanks!

[Sigma]

I live in Canada,Alberta

[JGCA]

Once you have paid corp tax on this $ 100K, what it earns subsequently is usually going to be taxed as investment income. In Alberta the small business tax rate is 14% ( you do not qualify for this ) your investment income tax rate on the interest you will earn or dividends ( whether form within Canada or outside Canada) is 45% BUT if you withdraw the income out as taxable dividend to yourself the corp will get back a dividend refund of $ 1 for every $3 it pays out so the tax to the corp will be reduced down to 18% as ong as you pay out enough dividends. Remember you have to maintain the company as a Canadian Controlled Private Corp orelse you will not be allowed to recover the penalty tax and will end up paying 45%.

[Sigma]

Hey thanks for the reply,
So from what you said I infer for 100k
1. I have to pay 14% tax at end of year. This would be like 86k
2. On 86k if I make a 10% interest = 8,600. I pay tax of 45% on 8,600 = 4,100 (8-O) {R they nuts!!!!!} :P

Finally, what you are saying is if I take 86k as my dividend than I get exempted for 28,667 (1$ for 3$). So I pay taxes for 57,334 at special rate for dividends i.e 10%?? If so I need to talk to my accountant..

Thanks a lot for your help.

[nelsona]

This is a cross-border accounting forum. Hire a CPA

[JGCA]

1) yes, but you already have paid tax on this.
2) NO, its complicated do not hire a CPA, its CND get yourself a CA, or someone who does domestic corp tax ( CPA usually only do US tax , unless they hold a dual designation).