Mr. Chan has created a holding company between himself and his corporation which earns only active business income. This will permit which of the following?
A) The holding company will receive dividends from the corporation, free of tax.
B) Mr. Chan will receive dividends from the holding company, free of tax.
C) The corporation's income will not be taxed.
D) Mr. Chan will receive dividends from the corporation, free of tax.

Question

Quizplus · Accepted Answer

Dividends paid from a corporation to a holding company are typically tax-free due to inter-corporate dividend rules, allowing the holding company to receive dividends without immediate tax implications.

Mr Chan Has Created a Holding Company Between Himself and His