Prince Edward Island – Provincial corporation tax

What's new for corporations

Lower rate

The lower rate of Prince Edward Island income tax is 4.5%effective April 1, 2013. It was previously 1%.

The tax is prorated based on the number of days in the year when the tax year straddles April 1, 2013.

This rate applies to:

  • taxable income earned in Prince Edward Island that qualifies for the federal small business deduction; and
  • a credit union's income that qualifies for the additional deduction under subsection 137(3) of the federal Income Tax Act.

Higher rate

The higher rate of income tax is 16%. This rate applies to taxable income that does not qualify for the federal small business deduction.

For more information, see Dual tax rates.

Reporting the tax

You can use Schedule 322, Prince Edward Island Corporation Tax Calculation, to help you calculate the Prince Edward Island tax before the credits are applied. You do not have to file it with your return. See the schedule for more details.

On line 210 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of tax calculated.

Claiming the credits

Prince Edward Island offers different tax credits. Details of each credit can be found in the following pages and their associated schedules:

Forms and publications

Government partners