Corporate Income Tax Optimizer (CITO)

The Corporate Income Tax Optimizer (CITO) offers a strategic framework to help owners of incorporated businesses assess the tax implications of passive investment income. It explains the benefits of investing in corporate-owned life and critical illness insurance. These include reducing tax impacts, providing non-taxable benefits in the event of death or covered critical illness, increasing business liquidity and providing retirement income as needed.

How it works

The Corporate Income Tax Optimizer (CITO) is part of a dynamic planning approach offered by Desjardins Insurance. This concept is designed to help owners of incorporated businesses to assess the impact of passive investment income rules on their business and highlight the following benefits of taking out corporate-owned life and critical illness insurance:

Retained earnings are reallocated to pay insurance premiums, which reduces the tax impact of passive investment income rules
Death and critical illness benefits are non-taxable
This approach can help to increase liquidity for future operations and provide potential retirement income for a shareholder or key employee of the business

It helps improve how a business manages risk in the event of death, critical illness or retirement of a shareholder or key employee.

Available products

Life insurance with a business policyowner: term, permanent, participating whole life, universal life
Critical illness insurance with a business policyowner: Health Priorities – Term and permanent
Health Priorities – Business with Executive Health Plan (EHP) concept

Target clientele

Illustration creation

The Corporate Income Tax Optimizer (CITO) is available in the illustration tool.

Go to the Strategies tab and open the Concepts – Business Owners menu. This is a calculator, so you don't need to fill out the Clients and Products tabs.

Procedure

Click on the Strategies tab
Open the Concepts section
Select Corporate Income Tax Optimizer in the drop-down menu
Click Export to download the concept
When the browser has finished downloading the spreadsheet, open it directly from the link in the browser or from your Downloads folder
Enable content and macros when opening the spreadsheet
This screen will open:
Enter the required information in the various sections of the form
- You'll see 2 dynamic graphs on the right side of the screen. These will be updated as you enter information in the form. That will give you some insight in real time before you generate the report.
Select the PDF icon to display the report once you've entered all the data
The concept report showing the passive investment income impact over a 10-year horizon will open in a PDF file
A copy of the report is automatically saved in the \Downloads\Desjardins directory, so you don't have to save the report manually and you can print and email the document
When you've finished viewing the report, go back to the data entry screen and click Quit.

Sales material