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Old 02-01-2020, 10:59 AM
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Originally Posted by Unregistered View Post
Thanks i just read it. So essentially because canada personal tax is high, it is better to keep earnings in the medical professional corporation (mpc) to enjoy a lower tax rate. And keep the cashflow for future business expenses. Only withdraw what you need minimally as salary or dividend. (Coz both salary or dividend is taxable at personal level)

On retirement, you can do controlled slow withdrawal over the years to make sure the personal tax bracket is not high.

The role of mpc is really to help doctors manage their clinic funds. It helps to encourage savings for retirement too indirectly since most of ur monies will be in the mpc.

Of course when u withdraw for personal use, u are still subjected to the tax

Thanks for sharing!

On the other hand singapore’s dividend are not taxable. So the point of companies is really to avoid personal income tax, enjoy lower corporate tax.

in summary canada mpc works as a deferred tax system (you eventually still got to pay ur personal taxes when you withdraw) while sg shell companies works as tax avoidance tool, (benefiting from marginal difference between sg corporate and personal tax, and tax free dividends)
Sg shell companies is for tax evasion not avoidance.

Tax rate already so low in Singapore.
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