Below you will find an analysis of the combined Federal(a)(b) and Provincial corporate income tax rates by province. The table is split into rates for Canadian Controlled Private Corporations (CCPC) and those corporations that are not Canadian controlled and private (Non-CCPC). CCPC's are corporations that are eligible for the federal small business deduction. Other corporations include those that are foreign owned or those whose shares are traded publicly. The tax rates are further split into rates for manufacturing income and non-manufacturing income.
| Non-CCPC's | CCPC's |
|---|
| Provinces | Mfg. | Non-Mfg. | Mfg. | Non-Mfg. |
|---|---|---|---|---|
| British Columbia(c) | 38.6% | 45.6% | 22.1% | 22.1% |
| Alberta | 36.6% | 44.6% | 19.1% | 19.1% |
| Saskatchewan | 39.1% | 46.1% | 21.1% | 21.1% |
| Manitoba | 39.1% | 46.1% | 22.1% | 22.1% |
| Ontario(d) | 35.6% | 44.6% | 22.6% | 22.6% |
| Quebec(e) | 31.0% | 38.0% | 18.9% | 18.9% |
| New Brunswick | 39.1% | 46.1% | 20.1% | 20.1% |
| Nova Scotia | 38.1% | 45.1% | 18.1% | 18.1% |
| Prince Edward Island | 29.6% | 44.1% | 20.6% | 20.6% |
| Newfoundland | 27.1% | 43.1% | 18.1% | 18.1% |
| Yukon Territory | 24.6% | 44.1% | 15.6% | 19.1% |
| Northwest Territories | 36.1% | 43.1% | 18.1% | 18.1% |
(a) The federal rates include the 4% corporate surtax applicable to all federal tax, net of applicable logging tax credits and special credits for investment corporations and credit unions. The federal surtax does not apply to non-resident-owned investment corporations nor to the capital gains refund recieved by a mutual fund or investment corporation.
(b) The 1995 Federal Budget increased the corporate surtax from 3% to 4% for taxation years ending after February 27, 1995. For taxation years that include February 27, 1995, the surtax increase is prorated to reflect the number of days in the tax year which occurred after the budget date.
(c) The 1996 B.C. budget announced a reduction in the small business income tax rate for CCPC's from 10% to 9% effective july 1, 1996. The table of 1996 rates reflects this adjustment as though it were effective at the beginning of the year. For year-ends that include July 1, 1996 the rate reduction must be pro-rated accordingly.
The 1996 B.C, budget also introduced a two-year income tax holiday for eligible new small businesses incorporated on or after May 1, 1996 and on or before March 31, 2001. The tax holiday is only applicable to income that qualifies for the small business rate. Some further restrictions apply.
(d) An Ontario surtax is levied on corporations claiming the Ontario small business deduction. The surtax is equal to the lesser of:
(e) These Quebec rates are for active business income only. Non-active business income is taxed at 16.25%.
This above provided for information purposes only. Tax rates are current as indicated. Your particular situation may vary with your specific circumstances.
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