Corporate Tax Planning Lawyers

If you own a business or are about to incorporate one, how it is structured decides how much tax you pay now, later and when you sell or pass it on. A corporate tax lawyer helps you set up that structure legally and document it properly. On this page you can compare lawyers who handle corporate tax planning, see their rates and availability, and book a consultation online.

Corporate tax planning is one part of tax law. For tax questions more broadly, see our page on tax lawyers.

What a corporate tax lawyer does

Corporate tax planning is legal work as much as number work. Depending on your situation, a lawyer can:

• Design your structure: which corporations to create, who holds which shares, and why.
• Draft the documents: articles, share terms, shareholder agreements, trust deeds and the resolutions that carry out the plan.
• Give a legal opinion: on how the tax rules apply to a proposed transaction and where the risks are.
• Plan a sale or succession: so the business can change hands without avoidable tax.

Tax lawyer or accountant: who does what

Most business owners need both. Your accountant usually prepares financial statements and tax returns and often spots when planning is needed. A tax lawyer interprets the law, designs and drafts the legal side of a plan, and can defend it if the tax authorities challenge it.

One practical difference is confidentiality. Communications with a lawyer for the purpose of legal advice are generally protected by solicitor-client privilege, while advice from an accountant generally is not. In Quebec, notaries also do tax and estate planning work, so you may see both lawyers and notaries in this field.

Structuring when you incorporate

Choices made at incorporation are the hardest to undo: which classes of shares to create, whether family members hold shares, and whether the operating company is owned directly or through a holding company.

A holding company is a corporation that owns shares of your operating company. It is commonly used to move surplus profits out of the business, protect those assets from the operating company's creditors, and prepare for a future sale or estate freeze. It adds cost and paperwork, so it is not right for everyone. For the corporate side of forming and running a company, see our page on business and corporate lawyers.

Salary or dividends

As an owner-manager, you can generally pay yourself a salary, dividends or a mix. A salary is a deductible expense for the corporation, creates retirement savings room and involves payroll contributions, including to the Québec Pension Plan. Dividends are paid from after-tax profits and are taxed differently in your hands.

The right mix depends on your income needs and retirement plans, and can change from year to year. Rules on income splitting also limit how much can be paid to family members who are not active in the business, so paying relatives needs care.

Estate freezes and family trusts

An estate freeze is a way to lock in the current value of your shares, usually by exchanging them for fixed-value preferred shares, so that future growth goes to new shares held by your children or a family trust. It can limit the tax on your death and help plan a succession.

A family trust is often used to hold those new growth shares, which gives flexibility about who benefits later. Trusts have their own reporting obligations and tax rules, so the deed and its administration must be done right.

Selling your business

How a sale is structured matters as much as the price. A buyer may prefer to buy assets while you would rather sell shares, and the tax results differ.

If you sell shares of a qualifying small business corporation, you may be able to use the lifetime capital gains exemption, which can shelter part of the gain from tax. The shares and the business must meet several conditions, often for some time before the sale, so a lawyer can check whether you qualify.

Reorganizations

Businesses change: partners come and go, family members join, companies are merged or wound up. The tax rules allow many changes to be made on a tax-deferred basis, such as transferring assets to a corporation, exchanging shares, amalgamating companies or moving assets between related corporations, as long as the steps and elections are done correctly. A lawyer designs the sequence and drafts the documents.

How corporate tax works in Quebec

A corporation in Quebec deals with two tax authorities. Federal corporate income tax is administered by the Canada Revenue Agency under the federal Income Tax Act; see the CRA's information for corporations. Unlike most provinces, Quebec also administers its own corporate income tax through Revenu Québec, so a Quebec corporation generally files a separate Quebec return in addition to its federal one.

The two sets of rules are similar but not identical, and a plan must work under both.

Plans must have real substance

Both the federal and Quebec tax laws contain general anti-avoidance rules. These let the authorities deny a tax benefit from a transaction that complies with the letter of the law but abuses its purpose, and the federal rule has been strengthened in recent years. Certain planning transactions must also be disclosed to the tax authorities.

In practice, a good plan has a real business or family purpose and is properly documented. Be wary of schemes that seem too good to be true.

When to get a lawyer

• You are about to incorporate, or to move an existing business into a corporation.
• Your business is generating more profit than you need to live on.
• You are thinking about bringing in a partner, investor or family member.
• You want to plan for retirement, a sale or passing the business to your children.

Preparing for your consultation

• Your corporate documents: articles, share register and any shareholder agreement.
• Recent financial statements and tax returns for the corporation.
• An organization chart of who owns what, including any trusts or holding companies.
• Your goals: income, retirement, a sale date or succession plans.

Compare and book on JustiConnect

Browse the lawyers listed below, filter by location, rates and availability, and book a consultation directly. You can also search all corporate tax planning lawyers or see corporate tax lawyers in Montreal. Before you book, read our guide on how to choose a lawyer in Quebec.

Frequently asked questions

What does a corporate tax lawyer actually do?

They advise on how tax law applies to your business, design structures such as holding companies and estate freezes, draft the documents, and represent you if a plan is questioned.

Do I need a tax lawyer if I already have an accountant?

Often, yes, for anything beyond routine filings. Your accountant handles the numbers and returns; a lawyer handles the legal design and documents, and their advice is generally privileged. The best results usually come from the two working together.

Is a holding company always worth it?

No. It can help with retaining profits, protecting assets and planning a sale, but it adds costs and complexity. Whether it makes sense depends on your profits, goals and timeline.

Can a tax lawyer deal with the CRA or Revenu Québec for me?

Yes. A lawyer can communicate with the tax authorities on your behalf, respond to questions about a plan and, if needed, challenge a reassessment.