Canada Revenue Agency
www.cra.gc.ca
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Ontario - Provincial corporation tax
For a summary of the most recent changes, see What's new for corporations.
For tax years ending in 2009 or later, corporations that have a permanent establishment in Ontario have to file a harmonized T2 Corporation Income Tax Return with the CRA. The harmonized return includes the following Ontario corporation taxes: corporate income tax, including refundable tax credits, corporate minimum tax, capital tax, and special additional tax on life insurance corporations.
If a corporation's fluctuating fiscal period ends in January 2009 and it does not have a tax year ending in 2008, send your payments for the Ontario corporations tax to the Ontario Ministry of Revenue for that fluctuating fiscal period. File a CT23 Corporations Tax and Annual Return or a Corporations Tax Return CT8 with the Ontario Ministry of Revenue for that same fluctuating fiscal period.
Basic rate
The Ontario basic income tax rate is 14%. It will be reduced as follows:
- 12% effective July 1, 2010;
- 11.5% effective July 1, 2011;
- 11% effective July 1, 2012; and
- 10% effective July 1, 2013.
Lower rate
The Ontario small business deduction reduces Ontario basic income tax by 8.5%, resulting in a lower tax rate of 5.5%. This tax rate will be reduced to 4.5% effective July 1, 2010.
Reporting the tax
The harmonized return will include the following Ontario corporation taxes:
- Basic income tax
- Surtax re Ontario small business deduction
- Corporate minimum tax
- Special additional tax re life insurance
- Capital tax
- Additional tax re Crown royalties
Transitional measures
The Ontario transitional tax debits and credits provide a transition from the Corporations Tax Act (Ontario) for corporations with different income tax attributes for federal and Ontario purposes.
Claiming the credits
Ontario offers different tax credits. Details of each credit can be found in the following pages and their associated schedules:
- Apprenticeship training tax credit
- Business-research institute tax credit
- Capital gains refund
- Co-operative education tax credit
- Corporate minimum tax credit
- Credit union tax reduction
- Foreign tax credit
- Innovation tax credit
- Political contributions tax credit
- Qualifying environmental trust tax credit
- Refundable media tax credits
- Book publishing tax credit
- Computer animation and special effects tax credit
- Interactive digital media tax credit
- Film and television tax credit
- Production services tax credit
- Sound recording tax credit
- Research and development tax credit
- Resource tax credit
- Tax credit for manufacturing and processing
