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A Canadian controlled private corporation has Net income for tax purposes of $273,000 and Taxable
Income of $220,000. All of this income is Active Business Income and is earned in Canada and qualifies
for the Small Business Deduction. The provincial tax rate applicable to income eligible for the small
business deduction is 3%. The Small Business deduction rate is 17.5% and General Rate Reduction is 13%
1) Calculate the corporations tax payable
2) What is the effective tax rate?
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