Final answer:
A corporation may receive tax benefits from owning a substantial portion of another company, often at thresholds starting at 50% or more for 'controlled groups'.
Step-by-step explanation:
To answer the question about the percentage of ownership a corporation needs to have in another company to be entitled to tax benefits, it is critical to understand the concept of dividends and the corporate structure. When a corporation owns shares in another company, the profits of that company can be shared with the shareholders through dividends. The amount of dividends received is proportional to the number of shares owned.
Moreover, corporate structures allow entities to raise capital by selling stock or issuing bonds. This structure provides owners, or shareholders, with profit shares while limiting legal liability. In the context of taxes, a corporation is considered a separate legal entity and must pay corporate income taxes on its profits. Taxable income levels and corresponding tax benefits can vary based on the jurisdiction and specific tax laws in place.
It is generally understood that significant tax benefits, such as consolidated tax returns or tax-free dividends, can occur when one corporation owns a substantial portion of another, often starting at 50% ownership or more to be considered a 'controlled group'. However, the specific threshold for tax benefits can depend on the country's tax regulations and the corporation's strategic tax planning. Always consult the current tax code or a tax professional for the most accurate and up-to-date information regarding corporate tax benefits related to ownership percentages.