Here is my look at business/corporate taxation policies.

1. HOW DO
CORPORATE
PROFITS FLOW
BY: PAUL YOUNG,
CPA, CGA
DATE: SEPTEMBER
20, 2020

2. PAUL YOUNG - BIO
• CPA, CGA
• Financial Solutions
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
• SME – Emerging Technology
• SME – Cloud-based solutions
Contact information:
Paul_Young_CGA@Hotmail.com

3. AGENDA
• What are mutual funds
• What are institutional
investors
• What are dividends
• Investment decisions
• Why do Countries Tax
Income
• What is BEPS
• Digital Tax
• Small business tax reforms
• Tax Avoidance definition
GDP / Per capita
Blog – Corporate Tax
Blog – Corporate Tax
PBO and Corporate Tax
How does tax income flow
Why is innovation important
Green Party and Taxation
Alexandria Ocasio-Cortex / Taxation
Socialism
Government Taxation and Spending
Sample of Financial Statement
Analysis of Revenue
Analysis of Cost
Analysis of After Tax income

4. INTRODUCTION
THIS
PRESENTATION
LOOKS AT
CORPORATE TAX
INCLUDE THE
ISSUES FACING
THE CORPORATE
TAXATION.

5. MUTUAL FUND
• What is a mutual fund
• A mutual fund is quite simply
a collection of stocks, bonds,
or other securities owned by a
group of investors and
managed by a professional
investment company. When
you put money into a mutual
fund, it is combined with
money from similar-minded
investors. Source -
http://www.globefund.com/c
entre/GettingStarted02.html

6. INSTITUTION
AL
INVESTORS
• What are institutional investors?
• An institutional investor is a nonbank person or
organization that trades securities in large enough share
quantities or dollar amounts that it qualifies for
preferential treatment and lower commissions.
Institutional investors face fewer protective regulations
because it is assumed they are more knowledgeable and
better able to protect themselves. Examples
of institutional investors include pension funds and life
insurance companies.
• An institutional investor is an organization that invests
on behalf of its members. Examples include endowment
funds, commercial banks, mutual funds and hedge
funds.
Source:
http://www.investopedia.com/terms/i/institutionalinvest
or.asp

7. DIVIDENDS
• What are dividends?
• A dividend is a distribution of a portion of a company's earnings,
decided by the board of directors, to a class of its shareholders.
Dividends can be issued as cash payments, as shares of stock, or
other property
Source -
Investopedia http://www.investopedia.com/terms/d/dividend.asp#ixzz
4N0nwF2E6

8. STOCK MARKET
SOURCE – STATS CANADA, BMO AND TSX

9. GOVT –
FISCAL
MANAGEME
NT
• GDP growth is 2%
on avg for Trudeau
• Trudeau has no
balance budget

10. BUSINESS SUBSIDIES
https://www.nextbigfuture.com/2019/06/coal-oil-and-gas-subsidies-are-5-trillion-per-year-because-of-uncharged-air-
pollution.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2Fadvancednano+%28nextbigfuture%29
Here is what I told people.
Can you show me how business is getting subsidies or tax breaks or other benefits? FYI – It is private sector that create jobs and not the government. The role of
government is set policies to encourage investment. BTW: How did the NDP fair in both Ontario, MB, SK and AB over the past 20+ years?
1. Companies pay environment charges - https://business.financialpost.com/entrepreneur/regulatory-accumulation-is-still-damming-entrepreneurial-flow-comment or
https://www150.statcan.gc.ca/n1/daily-quotidien/181214/dq181214d-eng.htm
2. Tesla - How this not a subsidy? https://www.nextbigfuture.com/2019/09/tesla-gets-10-tax-exemption-in-
china.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2Fadvancednano+%28nextbigfuture%29 @realDonaldTrump
3. Companies downsizing - https://business.financialpost.com/commodities/energy/exclusive-spains-repsol-cuts-30-of-canadian-staff-in-global-
restructuring?utm_medium=Social&utm_source=Facebook&fbclid=IwAR20OQ-
lF4DZZ2XdU2DimCNOg046pGwf_j161xMWqNiGfjq3GyuX3ofnnaE#Echobox=1560944759
4. Products include many environment costs as part of their product cost
5. Clean Technology relies on direct subsidies - https://www.fraserinstitute.org/article/despite-decades-of-government-subsidies-canadian-innovation-has-waned and
yet Clean Technology on average loses nearly $4B per year - https://www.bnnbloomberg.ca/awash-in-red-ink-canadian-clean-tech-struggling-despite-ottawa-s-
green-goals-1.729679
6. Many countries power production is made via fossil fuel. If you have plug in stations and/or other battery devices then they have a carbon footprint -
https://www.slideshare.net/paulyoungcga/2019-election-power-generation-clean-sources-canada-february-2019
7. There many pieces to the environment that are all but ignored - https://www.slideshare.net/paulyoungcga/2019-election-climate-change-and-the-environment-canada
8. Tax on Pollution - https://www.slideshare.net/paulyoungcga/art-of-taxing-pollution-canada-environment BTW: A carbon tax is like a consumption tax, right? Both
those taxes are regressive taxes which means they hurt the low to middle class more in terms of cost. https://www.slideshare.net/paulyoungcga/2019-election-
middle-class-canada-june-2019-149149542
9. Competitiveness - https://www.slideshare.net/paulyoungcga/2019-election-canada-and-global-competitiveness-may-2019
10. GDP Growth - https://www.slideshare.net/paulyoungcga/2019-election-gdp-and-economy-canada
11. National Pharmacare would cost $17B+ per year - https://www.slideshare.net/paulyoungcga/2019-election-drug-program-pharmacare-canada-june-2019
12. Wealthiest - https://www.slideshare.net/paulyoungcga/2019-election-top-1-wealthiest-canada-june-2019
13. Low ROI/Clean Technology - https://www.nextbigfuture.com/2019/07/low-energy-return-will-not-cause-a-
Singh is for Automotive subsidies, right
?
https://globalnews.ca/news/5903303/
ndp-auto-industry-jobs-incentives/

11. INVESTMENT DECISIONS
Personal Investor
Retirement Plans (RRSP,
TFSA, Bonds and other
options)
Holding Stocks
Buying and selling stock
Pension Funds
Goals
• Looking for business with
solid returns
Portfolio different
components
• Money Market
• Foreign Holdings
• Local Holdings
Institutional Investors
Goals
• Will look at companies
with a set rate of return
(i.e. 6-8% or higher)
• Will buy and sell chunk of
shares to managed their
returns

12. WHAT DO
WE TAX?
•If an investor has real estate and stock
portfolio those holding are not tax until they
are sold
•Capital Gains Taxation (based on selling of
Wealth)
What do countries not tax wealth
•Income earn from different sources of income
What do Countries Tax

13. WHAT IS BEPS
• The Organization for Economic Cooperation and Development
(OECD)’s Base Erosion and Profit Shifting (BEPS) initiative seeks to
close gaps in international taxation for companies that allegedly
avoid taxation or reduce tax burden in their home country by
engaging in tax inversions (moving operations) or by migrating
intangibles to lower tax jurisdictions. – Source -
https://www.pwc.com/gx/en/services/tax/tax-policy-
administration/beps.html

14. TAX AVOIDANCE DEFINITION
Tax avoidance is the use of legal methods to modify an individual's
financial situation to lower the amount of income tax owed. This is
generally accomplished by claiming the permissible deductions and
credits. This practice differs from tax evasion, which uses illegal
methods, such as underreporting income to avoid paying taxes.
Source - https://www.investopedia.com/terms/t/tax_avoidance.asp

15. DIGITAL TAX
Source - https://taxfoundation.org/digital-tax/ or https://taxfoundation.org/oecd-beps-
digital-tax/
• A DST is a tax on selected gross revenue streams of large digital companies. Each country’s
proposed or implemented DST differs slightly. For example, France applies a 3 percent tax on
revenues from targeted advertising, the transmission of data collected about users for advertising
purposes, and from providing a digital interface. All DSTs have domestic and global revenue
thresholds, below which companies are not subject to the tax. Back to top
• EU has led the charge on a digital tax - https://taxfoundation.org/digital-tax-europe-2020/
• Canada is imposing sales tax on digital transactions - https://quaderno.io/blog/digital-taxes-
around-world-know-new-tax-rules/
• United States taxation, especially sales tax charging on digital varies state by state -
https://quaderno.io/blog/digital-taxes-around-world-know-new-tax-rules/

16. SMALL BUSINESS TAX REFORMS
• Here is another group that @justintrudeau and @navdeepbains have ignored with all their policies
over the past four years - https://www.cbc.ca/news/politics/council-of-canadian-innovators-
ceos-pen-letter-innovation-1.5310290?fbclid=IwAR1EVBolxLLesLktXNLQ-lfWqhURP5SQY7CK3--
qbpE5Vfmg2ooCctwm60Y
• Tech Startups have complaining feverishly to Liberals about the changes to small taxes, i.e. income
sprinkling, passive income, tax rates, etc. The liberals ignored small tech startups as they have
spent more time courting large tech companies - https://www.slideshare.net/paulyoungcga/what-
is-next-for-canadas-technology-sector or taxation rules for small business -
https://www.slideshare.net/paulyoungcga/canada-whats-next-for-small-business
• Small business tax reforms - https://globalnews.ca/news/3743459/trudeau-tax-reforms-tax-
loopholes-small-business/ or https://www.investmentexecutive.com/news/industry-news/will-a-
minority-government-revisit-small-business-taxation/
•

17. BUSINESS TAX RANKING
Source - https://taxfoundation.org/publications/international-tax-competitiveness-index/ or
https://taxfoundation.org/publications/corporate-tax-rates-around-the-world/
Trudeau
Harper

18. BLOG –
CORPORATE
TAX
• Douglas Gray No it does not! Oil
pays their taxes and gets their
tax deduction. Clean Tech gets
R&D and/other deductions like
Oil and Gas. Clean Tech loses
money which means they do not
pay corporate taxation as there
is no taxable income.
https://www.slideshare.net/paul
youngcga/how-corporate-and-
business-taxation-flows-to-
government
• The liberals are handling grant
money out to clean tech via
SDTC - https://www.sdtc.ca/en/
• My advice to you is stop taking
comments from people that have
never done a corporate tax
return in their life.

19. BLOG – CORPORATE TAX
• Jean,
• Where are you getting your information? All I see is a bunch of word salads with no evidence to support your claim.
• FYI
• I all about solutions including a fair tax system. I am about all angles including delivery of program spending, re-looking at the tax code, shutting down tax havens,
etc.
• You appear to be anti-business as such likely will not read my posts, but will take the NDP at their word when it comes to taxation, right?
• Corporation pay carbon tax, excise taxes, payroll taxes, royalties, corporate income tax - https://www.slideshare.net/paulyoungcga/how-corporate-and-business-
taxation-flows-to-government
• Mutual funds and pension funds invest in corporations - https://www.investopedia.com/university/mutualfunds/mutualfunds.asp
• Many corporations do not get direct business subsidies - https://www.investopedia.com/articles/basics/11/introduction-to-government-subsidies.asp (Direct
subsidies are loans, grants, etc.)
• Tax deductions are not subsidies. Corporations have to qualified for tax deductions - https://taxfoundation.org/corporate-tax-rates-around-world-2018/ -
Countries need to be competitive with all their tax, environmental and other government policies.
• There are rules around income movement it is called transfer pricing. The rules have change based on BEPS -
https://www.osler.com/en/resources/regulations/2018/canada-begins-ratification-process-for-multilateral-tax-convention-to-implement-beps
• You want to fixed income taxation then go after the tax code - https://www.brookings.edu/research/a-golden-opportunity-to-simplify-the-tax-system-options-for-
reforming-a-complex-tax-code/
• Governments around the world need to go after tax havens - https://medium.com/@nslewis/tax-havens-make-gdp-screwy-c241430447d9 - Liberals refused to go
after tax havens as the panama papers have shown there are liberals with holdings in tax havens - https://www.cbc.ca/news/business/stephen-bronfman-trudeau-
paradise-papers-1.4382511
• Trudeau and Morneau have trust funds. Maybe it is time to go after trust funds - https://www.advisor.ca/tax/tax-news/cra-to-demand-more-info-on-trusts-
beginning-in-2021/

20. PBO / CORPORATE TAX
• https://www.theglobeandmail.com/politics/article-canadian-corporations-may-have-avoided-25-
billion-or-more-in-taxes-in/
Canadian companies
transferred more than $1.6-
trillion in 2018 to low-tax
countries known as offshore
financial centers and conduits
to these nations, according to
a new report by the
Parliamentary Budget Officer.
• Liberals decided to mess with small business tax rules
and/or make Canada less competitive. Businesses have
decided to re-look at their international expansion -
https://www150.statcan.gc.ca/n1/daily-
quotidien/190424/dq190424a-eng.htm or
https://www.slideshare.net/paulyoungcga/2019-
election-canada-and-global-competitiveness-may-
2019
• Transfer pricing rules
• Government needs to do a better job reviewing
transfer pricing rules
• https://www.grantthornton.ca/en/insights/Cam
eco-decision-Impact-on-CRA-transfer-pricing-
audits/
• Where is PBO on tax treaties
• You need tax treaties -
https://taxca.com/category/tax-treaties/
• Where has Morneau been on tax treaties?
• Where is the PBO on BEPS
• https://home.kpmg/xx/en/home/insights/2018/05
/tnf-oecd-review-of-11-preferential-regimes-
beps-inclusive-framework-members.html
• Profits flow via R&D or intercompany dividends or
intercompany interest

21. WHAT DO TAXES PAID
Schools
Schools
• Spending
• Teachers Salaries
• Support Staff Salaries
• Role
• Educate kids
Hospitals Hospital
• Spending
• Salaries
• Procurement
• Role
• Cure the sickHospitals
Infrastructure
• Spending
• Salaries
• Procurement
• Role
• Moved goods and people between different
Roads
Other Areas
• Retirement – CPP,
OAS, GIS
• Public Safety –
Police, Fire Military
• Training/Skills
Development
• Immigration
• Other Departmental
Spending

22. WHY IS
IMPORTANT
TO SUPPORT
INNOVATIO
N
• Innovation leads to business growth
and jobs
• Countries need to have the right
policies
• Stock options
• Corporate Taxation
• Personal Taxation
• Hydro Rates
• R&D Credits
• Trade and Foreign Investment
Protection

23. LOBLAWS –
SHARE PRICE

24. LOBLAWS – INCOME STATEMENT
Sales are
generated by
what customers
will purchase
from Loblaws
• Vendor
purchases
• Rebates
• Volume
discount
• Procuremen
t Cost• Employees
• Consumers
• Taxpayers
• Tax bodies
• Corporate
Taxation
• Payroll
Taxation
• Consumption

25. INCOME FLOW / STATEMENT OF EQUITY
Analysis
• Loblaws paid out 416M
in dividends
• Loblaws kept $144
million of earning for
the business

26. ALEXANDRIA OCASIO-CORTEZ / TAXATION
70% taxation rate
Source - https://taxfoundation.org/summary-
federal-income-tax-data-2017/ or
https://www.cbpp.org/research/federal-
tax/policy-basics-where-do-federal-tax-revenues-
come-from or
https://www.taxpolicycenter.org/briefing-
book/what-are-sources-revenue-federal-

27. GREEN
PARTY AND
CORPORATE
TAXATION
• Someone needs to explain to @MikeSchreiner how
taxing works. If your entity does not make taxable
income, then there is no corporate tax!
•
• https://torontosun.com/news/provincial/ontario-
lost-up-to-1-2-billion-selling-clean-energy-at-
a-loss-engineers
• https://www.bnnbloomberg.ca/awash-in-red-
ink-canadian-clean-tech-struggling-despite-
ottawa-s-green-goals-1.729679
• NR companies in general make profit -
https://globalnews.ca/news/4643295/canada-
big-oil-company-profits-report/
• Corporate Taxation -
https://www.slideshare.net/paulyoungcga/how-
do-corporate-taxes-flow-to-social-programs

28. PROBLEM WITH SOCIALISM
• Many people miss construed that providing social programs is the only
definition of socialism. Complete socialism means complete
government control all aspect of the economy and people’s lives
• Social programs need to be funded properly including tied to
outcomes. Too many government throw money at the symptoms which
never fixes the root cause when it comes to an issue
• Source - https://www.slideshare.net/paulyoungcga/failures-of-socialism-
238542106

29. GOVERNMENT ROLE
• Government role is set policy to ensure tax fairness
• Government role is to deliver social spending in a way that
outcomes are improve as well as money is delivering in a value
for money way
• Reforming Government -
https://www.slideshare.net/paulyoungcga/how-to-reform-the-public-
sector-in-canada-and-around-the-world

30. WHAT IS
REQUIRED
• All governments need to put more focus on economic development.
• No to a wealth tax - https://www.slideshare.net/paulyoungcga/wealth-tax-does-the-
world-need-a-wealth-tax
• Canada needs to be competitive - https://www.slideshare.net/paulyoungcga/canada-
competitiveness-analysis-of-policy
• The Income Tax act needs to be overhauled -
https://www.slideshare.net/paulyoungcga/designing-social-programs-and-tax-
fairness-policies
• Expansion of tax treaties and better enforcement of BEPS
• CRA is struggling with both moneys and resources -
https://www.cbc.ca/news/politics/tax-debt-liberal-budget-collections-
1.4715967 or https://www.cbc.ca/news/politics/cra-tax-avoidance-evasion-
1.4787781
• More is required to eliminate tax havens and/or profit shifting. BEPS was a good first
start - https://www.dwpv.com/en/Insights/Publications/2019/US-Regulations-Target-
Hybrid-Structures
• Majority of the taxes collected are from payroll taxes. The private sector plays a vital
role in the collection of taxes.
• Carbon taxation are regressive tax and do nothing for the environment -
• Governments need to focus on the delivery of their program spending via value for
money and/or activity-based costing models. -
https://www.slideshare.net/paulyoungcga/how-to-reform-local-and-municipal-
government or https://www.slideshare.net/paulyoungcga/the-role-of-operational-
and-performancebased-auditing-on-government-and-the-private-sector
• Governments need to stop thinking you can tax people to prosperity -
https://www.slideshare.net/paulyoungcga/transforming-the-economy-postcovid19-
canada-and-the-world