A CCPC is a private corporation resident in Canada that is not controlled by non-residents or public companies, and it qualifies for valuable tax advantages.
CCPC status unlocks the most important tax breaks available to a small Canadian company: the small business deduction, which lowers the federal rate to 9% on the first $500,000 of active business income, the lifetime capital gains exemption on a sale of qualifying shares, and enhanced treatment of certain investment tax credits.
To be a CCPC a corporation must be private, resident in Canada, and not controlled directly or indirectly by non-residents, public corporations, or a combination of them. Losing CCPC status, for example by bringing in a controlling non-resident shareholder, forfeits these benefits, so ownership structure needs care.
A software company owned entirely by Canadian residents is a CCPC and pays roughly 12% combined tax on its first $500,000 of profit. If a US parent later acquires control, it ceases to be a CCPC and loses the small business deduction.
Our certified accounting firm handles this for businesses and individuals across Canada, at fixed fees with no surprises.
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