Ontario capital tax on financial institutions

The rates of capital tax payable by financial institutions are:

Foreign banks

The investment allowance of an authorized foreign bank is generally calculated in the same way as for other financial institutions under the Taxation Act, 2007 (Ontario). However, an investment made by an authorized foreign bank is not eligible if the investee corporation is exempt from capital tax.

Note
An authorized foreign bank is defined by section 2 of the Bank Act and in general terms is a foreign bank authorized to operate in Canada through a branch. The paid-up capital of an authorized foreign bank is the same amount as its capital for federal large corporations tax purposes.

Reporting capital tax payable

To calculate the capital tax payable by a financial institution, complete the following:

• Schedule 34, Part I.3 Tax on Financial Institutions;
• Schedule 514, Ontario Capital Tax on Financial Institutions; and
• Schedule 517, Calculation of Ontario Capital Tax Investment Allowance for Financial Institutions.

File completed Schedules 34 and 514 with the T2 return within six months of the end of the tax year. Schedule 517 is a worksheet and does not have to be filed with the T2 return.

On line 282 of Schedule 5, Tax Calculation Supplementary - Corporations, enter the capital tax payable.

Forms and publications

• Schedule 5, Tax Calculation Supplementary - Corporations
• Schedule 34, Part I.3 Tax on Financial Institutions
• Schedule 514, Ontario Capital Tax on Financial Institutions
• Schedule 517, Calculation of Ontario Capital Tax Investment Allowance for Financial Institutions

Government partners

• Ontario (Ministry of Revenue)
• Ontario (e-Laws)