Federal Corporate Tax Rates
| Type of Taxation | |
|---|---|
| Basic Rate | 38% of taxable income |
| 28% after federal tax abatement | |
| 15% net tax rate after the general tax reduction | |
| Canadian-controlled private corporations (CCPCs) claiming the small business deduction | 9% net tax rate 10% net tax rate 10.5% net tax rate |
Source: Federal Government of Canada
Provincial and Territorial Corporation Tax Rates
Generally, provinces and territories have two rates of income tax – a lower rate and a higher rate.
- Lower rate – applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit.
- Higher rate – applies to all other income.
For BC, the lower small business rate is applicable to Canadian-controlled private corporations (CCPCs) with active business income eligible for the federal small business deduction. Generally, active business income is income earned by a corporation from a business other than a specified investment business or a personal service business.
- The lower small business rate applies to active business income up to the B.C. business limit of: $500,000 (effective January 1, 2010)
- The general (higher) rate applies to income over $500,000 and any income that is not eligible for the lower small business rate (e.g. investment income).
The following table shows the income tax rates for provinces and territories. These rates are in effect January 1, 2020, and may change during the year.
Provincial and Territorial Tax Rates
| Province or Territory | Lower rate | Higher rate |
|---|---|---|
| British Columbia | 2% | 12% |
| Alberta | General rate of 8% | |
| Saskatchewan | 2% | 12% |
| Manitoba | nil | 12% |
| Ontario | 3.2% | 11.5% |
| Newfoundland and Labrador | 3% | 15% |
| New Brunswick | 2.5% | 14% |
| Prince Edward Island | 3% | 16% |
| Nova Scotia | 3% | 16% |
| Yukon | 2% | 12% |
| Northwest Territories | 4% | 11.5% |
| Nunavut | 3% | 12% |
Source: Federal Government of Canada
