IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.
Many Canadians support non-profit organisations through Charitable Contributions. But as a business owner, which is the most tax-efficient way to donate? Through your corporation or personally? The answer, like most tax questions, is: It depends!
Let’s look at a scenario of a company with $80,000 in net income and a target $5,000 donation. For the sake of this example we are assuming that this is a Corporation (not a Sole Proprietor – see below), all income is active business income eligible for the Small Business Deduction, the owner is receiving remuneration exclusively by dividend, company is distributing all available bet income to the owner and has no other income or deductions. I am using 2019 Ontario tax rates.