| Summary: | Taxpayers in the Canadian professions have expressed their opinions, individually, and through their professional association, that they are unfairly taxed under present taxation legislation. While they are able to deduct the expenses incurred to earn their professional income, they would like to be placed on an equal tax basis with merchants and other taxpayers in the service industries who are able to incorporate and take advantage of certain tax concessions available to corporate taxpayers.
The British Columbia government enacted the Professional
Corporations Act in 1970 which gave the option of incorporation to all taxpayers who previously, due to either law, tradition, or their professional code of ethics were unable to incorporate. Confusion arose as to whether the Department of National Revenue would recognize professional corporations and the British Columbia Act was subsequently suspended.
The Canadian taxation system has been intensively investigated in recent years and extensive amendments have been proposed by the government. To achieve equity Canadian professionals should be subject to the same tax burden as other Canadian businesses.
Professional incorporation should not be permitted due to the ethical problems it would raise. Instead professionals
should be given the option under the Income Tax Act of having their income taxed at corporate rates and in addition being able to take advantage of the other tax planning mechanisms presently available to corporations. Equity will thus be established between taxpayers in the professions and other Canadian businesses. === Business, Sauder School of === Graduate
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