How much tax do you pay?

when you do a tax deferral by paying yourself a dividend and withdraw it in BC (Canada)?

How much tax u pay depends on whether ur didvidend eligible for the enhance dividend tax credit in BC.

Profit earned by a corporation is taxed; then, when the after-tax profit is distributed in the form of dividends, it is taxed again in the hands of the shareholder but eligible for the dividend tax credit.

On February 19, 2008, the government introduced legislation to reduce the dividend tax credit.

Dividends received from taxable Canadian corporations qualify for the dividend tax credit.

When including these dividends in income, the "taxable dividend" is reported as 125% of the actual dividend (dividend plus 25% gross up).

The B.C. dividend tax credit is calculated as:
2009- 21.0% of gross up (4.2% of taxable dividend)
2002 - 2008- 25.5% of gross up (5.1% of taxable dividend)

Starting in 2006, the calculation of the B.C. dividend tax credit changed. Eligible dividends received from Canadian corporations may qualify for the Enhanced Dividend Tax Credit.

When including these dividends eligigle for the enhanced dividend tax credit, the eligible dividend is reported as 145% of the actual eligible dividend received.

The British Columbia Enhanced Dividend Tax Credit is calculated as:
2009- 35 4/9% of gross up (11% of taxable eligible dividend)
2006 - 2008- 38 2 / 3 % of gross up (12% of taxable eligible dividend)