CDA Capital provides an opportunity for accredited investors to fund small and medium-size companies in a tax efficient manner and to receive quarterly dividend income.
Individual Canadian residents may elect to receive either a capital dividend or a regular dividend.
In certain situations, capital dividends are tax-free to individual Canadian residents. Regular dividends may be subject to preferential tax treatment.
As an example, in Alberta an individual taxpayer in the highest tax bracket pays about 24% tax on capital gains, about 34% tax on eligible dividend income, and about 48% tax on interest income.
As the following example shows, an interest rate of 19.2% is required to achieve the same 10.0% tax free capital dividend rate:
Capital Dividend Received 10.0%
Less: Taxes on Capital Dividend 0%
After Tax Return 10.0%
as opposed to
Equivalent Interest Rate Required 19.2%
Less: Taxes (assuming 48% tax rate) 9.2%
After Tax Return 10.0%
Please note that investors should consult their own tax advisors as tax consequences vary based on each investor's unique fact situation.
Copyright © 2023 CDA Capital - All Rights Reserved.
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.