A business owner wants to invest $100,000 of corporate retained earnings into a GIC. He believes he will pay less tax by keeping the interest inside the corporation rather than taking the money out and investing it personally. Which fact should the advisor highlight?

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Corporate passive income is taxed at a high upfront flat rate (often near 50%) to prevent tax deferral advantages over personal investing.

A business owner wants to invest $100,000 of corporate retained earnings into a GIC. He believes he will pay less tax by keeping the interest inside the corporation rather than taking the money out and investing it personally. Which fact should the advisor highlight?

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