Management Glossary

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personal service corporation

Commonly abbreviated as "PSC," a personal service corporation is a company in which the owner(s) act effectively in the same capacity for their client(s) as they would if they were employees of that/those client(s). The main and often only difference is the establishment of the personal services corporation, primarily to give the appearance of independence.

In many jurisdictions, if the tax authorities deem a company to be a PSC it will be denied the tax advantages normally given to companies. Instead, the PSC's employee(s) will, from a tax standpoint, be treated as if they are employees of the client.

Different countries have different criteria for deciding whether a company is a PSC and different tax treatments of a PSC. If in doubt, contact the tax authorities or a reputable accountant.

Contributed by: ManagerWise staff

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