|  Retirement
Compensation Arrangement
A Retirement Compensation Arrangement is an arrangement
permitted by the Income Tax Act (Canada), under which tax-deductible
contributions can be made to an RCA by either the employer, or by
the taxpayer where such contributions are required under an employment
agreement and are not greater than those contributed by the employer.
Income received by a taxpayer from an RCA is treated in the same
manner as pension income and subject to tax in the normal manner.
However, should the recipient no longer be a Canadian taxpayer as
the result of emigration from Canada, lower tax rates will apply
depending on the applicable Tax Treaty.
Company owners should consider establishing an RCA when:
(a) Closely held companies whose earnings typically exceed the small
business tax limit after paying adequate remuneration to the owners.
(b) Closely held companies residing in provinces where corporate
and personal income taxes are falling.
(c) Closely held companies whose principals have little or no pension
benefits.
(d) Closely held companies whose principals intent to sell at retirement
and emigrate from Canada.
For more information, email
us or contact us at 1-866-927-0111
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RCA FAQ's
 Taxation
of Benefits received by a Taxpayer from an RCA
Allowable Tax-Deductible Contributions to an RCA
Read more
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Setup Form
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