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04/23/2014

Taking control of your tax story

Article: Taking control of your tax storyFor the first time in its nine-year history, we asked Canada’s private company leaders about their satisfaction with provincial government tax policies and how they view the role of government in supporting private businesses.

Beyond the expected—the majority, 75%, of respondents feel that their provincial government has not done enough to reduce the tax burden—findings that vary based on geography and company size.

In this article, PwC’s Jason Safar and Nadja Ibrahim share their interpretation of the results and discuss how a well-planned tax strategy can help private companies stay ahead.

Read the full article here, or visit www.pwc.com/ca/businessinsights for more information.

04/16/2014

The role of government in supporting the private sector

Canada’s private business leaders are confident and optimistic for the year ahead. They’ve forecasted a strong growth rate of 7.6% and plan to achieve this through organic growth within the Canadian market.

What role does government play in helping private companies reach their aggressive targets?

image from http://s3.amazonaws.com/hires.aviary.com/k/mr6i2hifk4wxt1dp/14041616/08cf849c-6f82-41f2-b506-f5c8b7f2636f.png

Saul Plener, National Leader of PwC’s Private Company Services practice summarizes findings from over 350 Canadian private company leaders and shares advice on what they can do to capitalize on the government policies and incentives that are available.

 

 Click here to watch.  For more information, please visit www.pwc.com/ca/businessinsights

 

 

04/09/2014

Seven components of an effective acquisitions strategy

Make M&A a tool in your overall business plan

M&A done right is an effective way to enter new markets, acquire market share, launch new products and grow significantly. Keep the following components in mind when considering a future M&A strategy.

  1. The big picture: Where do you want to be in five years and how can you most effectively get there? Consider all the options for growth open to you.
  2. An execution strategy:  A big part of executing well is getting buy-in and communicating your overall strategy. Effective due diligence will include a focus on the target’s key value drivers and risk exposures.
  3. The right candidates: Analyze the market and assess the potential targets that will help you achieve your goals and make sense in terms of size and valuation.

Read additional insight in Building a sustainable future: Strategies for growth, a report that highlights the key findings from this year’s Business Insights Survey of Canadian private companies.

 

02/12/2014

How does the 2014 Federal budget affect you?

On February 11, 2014, the Federal Minister of Finance, Jim Flaherty, presented the majority government’s budget, which focused on more tightening and few tax breaks.  

Which of the tax initiatives proposed in the budget specifically impact Canadian private company leaders? We’ve highlighted two key initiatives to be aware of:

Taxation of Trusts and Estates
The 2013 budget announced the intention to consult on the potential elimination of graduated rates for testamentary trusts, certain estates, and grandfathered inter vivos trusts. The budget proposes to generally proceed with these measures. Specifically, the budget proposes to apply flat top-rate taxation to the above trusts and estates and make certain consequential changes. One exception to this proposal is that graduated rates will still apply for the first 36 months of an estate that arises as a consequence of an individual’s death and that is a testamentary trust. Another exception is for testamentary trusts for the benefit of individuals with disabilities.

Further proposed changes will ensure such trusts (except for the first 36 months of an estate) no longer benefit from special treatment under certain rules including:

  1. the requirement to remit instalments
  2. the requirement to have a calendar year-end
  3. alternative minimum tax requirements
  4. classification as a personal trust without regard to the circumstances in which beneficial interest are acquired
  5. liability for Part XII.2 tax

Testamentary trusts that do not already have a calendar year-end will be deemed to have a year that ends on December 31, 2015 (or, for an estate, the end of its 36-month period, if later).


Estate Donations
The budget proposes for the 2016 and subsequent taxation years to provide more flexibility in the tax treatment of charitable donations made in the context of a death that occurs after 2015. Donations made by a will, and those made by designation under a Registered Retirement Savings Plan, Registered Retirement Income Fund, Tax-Free Savings Account or life insurance policy, will no longer be deemed to be made by the individual immediately before the individual’s death. Instead, these donations will be deemed to have been made by the individual’s estate at the time the property is transferred to a qualified donee, provided the transfer occurs within 36 months after death. In addition, the trustee of the individual’s estate will have the flexibility to allocate the available donation among: the taxation year of the estate in which the donation is made; an earlier taxation year of the estate; or the last two taxation years of the individual. The current annual credit limits will continue to apply.


Go to www.pwc.com/ca/budget to read PwC’s Federal budget analysis — a summary of the tax initiatives proposed in the budget.

Download 2014 Federal Budget - Update for private companies 

For more information, or to discuss how these initiatives may impact your tax planning, contact:

Jason Safar
Private Company Services National Tax Leader, PwC
[email protected]

12/05/2013

Funding growth: cash or debt?

When does it make the most sense to take advantage of low-lending rates, rather than using cash flow to fund business activity?

Cash vs debt imageIf your balance sheet is strong (meaning your business is not highly levered and has capacity to take on additional debt) then this is the right time to access debt financing, particularly if you are in growth mode. It’s a good time to fund an acquisition, capital expansion (equipment), organic growth in the form of opening a new office or facility and to fund shareholder buy-outs. If you have more expensive debt, then now is the time to consider refinancing. Why? Two reasons:

  • Historically low interest rates and
  • The fact that banks are being very aggressive in terms of how much and on what terms they will lend.

Learn more in Building a sustainable future: Strategies for growth, a report that highlights the key findings from this year's Business Insights Survey.

11/22/2013

What to consider when expanding outside Canada’s borders

Are you a private company planning to expand your business outside of Canada? If so, you may want to consider the following:

  1. Comprehensive, multi-year strategic plans outlining customer demand, growth prospects, competition and demographics.
  2. A clear understanding of how business is conducted in the new market.
  3. Relationships on-the-ground with local government, banks and suppliers.
  4. Time in the region to gain as much knowledge as possible.
  5. Access to talent.
  6. A willingness to adapt and assimilate.
  7. An understanding of the tax and regulatory environment.

Learn why private companies should consider exploring new markets in Building a sustainable future: Strategies for growth, a report that highlights the key findings from this year’s Business Insights Survey.

10/01/2013

View our infographic - Early results from the 2013 Business Insights Survey!

Canadian private companies have told us that they’re confident for growth in the year ahead, but is this wave of optimism going in the right direction?  View our infographic to preview the key findings from this year's Business Insights Survey of Canadian Private Companies!

BI-Infographic-September-FINAL

07/12/2013

Tax strategies for family businesses

Findings from Creating a lasting legacy, the 2012/13 Canadian supplement to PwC's Global Family Business Survey show that succession, specifically the tax implications of transitioning ownership of a business is keeping family business leaders up at night. In addition, many respondents believe they're at a disadvantage when it comes to tax, precisely because they are a family business. Does this perception reflect reality?

In this Let's Talk article, Jason Safar, Canadian Private Company Services tax leader, discusses the importance tax planning, steps to creating an effective tax strategy and how this can help family businesses capitalize on existing opportunities. 

06/05/2013

Missed our social media webinar on June 11th? Watch the recording!

In our latest webinar, Debbie Dimoff discusses social media and the impact of the digital customer on the future of your business.

One thing is certain–social media is here to stay. For private companies to continue to thrive in an increasingly competitive landscape, they will need to embrace social media as part of their business strategy, or risk being left behind.

In this session, you will learn about:

  • the foundations of an effective social media strategy and how to get started
  • how your social media strategy can attract top talent, improve customer relationships and build brand awareness
  • how to measure the success of your social media strategy

Click here to watch the recording

04/03/2013

Federal budget 2013 - The impact on Canadian private companies

Unfortunately for entrepreneurs, the 2013 federal budget continued the trend of recent budgets—shutting down perceived tax advantages for private business owners, while offering little if any new opportunities.

The latest planning tools that the Department of Finance has targeted relate to products offered by the life insurance industry, principally to private business owners and high net worth individuals.

Any individuals who have invested in a leveraged insurance solution commonly referred to as a 10/8 policy or more recently a 9/7 policy should consult with their insurance and tax advisors about the impact of the budget on their insurance planning.

Also, anyone who has invested in an insured life annuity arrangement involving borrowings should seek professional advice on the implications of the budget.

Finally, as bad news usually comes in threes, the budget also proposes to raise the federal tax rate on ineligible dividends by almost 2% commencing in 2014. The increase is even higher after taking into account provincial and territorial taxes.

On the plus side, the budget didn't raise any other taxes and increased the lifetime capital gains exemption from $750,000 to $800,000 starting 2014, with indexation of the amount after 2014.

For more information, contact:

Jason Safar
Canadian Private Company Services Tax Leader
[email protected]