What are Assessable Dividends?
Assessable dividends are dividends to which Part IV tax applies. They are amounts that are paid as dividends or are meant to represent the payment of dividends, where those dividends are eligible for deduction under either section 112, 113(1)(a), 113(1)(b), 113(1)(d), or 113(2) of the Income Tax Act. In short, they are dividends that if received by a corporation, would be tax free.
Dividends deductible under section 112 are taxable dividends received by a corporation from another taxable Canadian corporation, or a Canadian resident corporation that is controlled by the recipient corporation.
Dividends deductible under section 113 are certain dividends received from a foreign affiliate of a Canadian corporation.
Note: Articles are for general information only and do not constitute tax advice nor can they be relied upon. Call Faris CPA for assistance.