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Canada: Domestic Corporate Taxation

Corporate Tax Rates

This page was last updated on 5 June 2019.

Corporation tax rates vary depending on the territories and provinces in which the business operates. The effective federal rate is 28% (i.e. 38% less federal tax abatement of 10%).

Companies can claim a small business deduction. For Canadian-controlled private corporations, the net tax rate (from 1 January 2019) is 9%. For other corporations, the net tax rate has been set at 15% since 1 January 2012.

Provincial and territorial tax rates are charged at either a lower or higher rate. The lower rate applies to income eligible for the small business deduction or income based on limits set by the province or territory, and the higher rate applies to all other taxable income.

From 1 January 2019, the lower rate ranges from 0% in Manitoba to 4% in Nunavut and the Northwest Territories. The higher rate ranges from 11.5% in Ontario and the Northwest Territories to 16% in Nova Scotia and Prince Edward Island.

Note that the provinces of Quebec and Alberta do not have tax collection agreements with the Canada Revenue Agency and make their own tax collection arrangements.

 

 

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