It is necessary for corporations to designate dividends that they pay as eligible dividends which are eligible for the enhanced gross up and dividend tax credit procedure because:

Question

Quizplus · Accepted Answer

A) is correct because it acknowledges the complexity of corporate tax structures, where both CCPCs (Canadian-Controlled Private Corporations) and non-CCPCs may have portions of their income taxed at different rates, necessitating the designation of dividends as eligible for enhanced tax treatment to reflect the underlying tax paid on the income from which those dividends are paid.

It Is Necessary for Corporations to Designate Dividends That They