What is double taxation in a corporation?
A) Corporations must pay both provincial and federal taxes.
B) Corporations can double their earnings without higher taxes.
C) The corporation must pay taxes twice a year.
D) Earnings of the corporation and dividends of the shareholders are both taxed.

Question

Quizplus · Accepted Answer

Double taxation in a corporation refers to the situation where both the earnings of the corporation and the dividends paid to the shareholders are taxed. This means that the same income is being taxed twice, first at the company level and then at the individual level when the shareholder receives their dividend income.

What Is Double Taxation in a Corporation