Corporation tax rates

Federal rates

The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement.

After the general tax reduction, the net tax rate is:

  • 18% effective January 1, 2010
  • 16.5% effective January 1, 2011
  • 15% effective January 1, 2012

For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%.

Provincial or territorial rates

Generally, provinces and territories have two rates of income tax – a lower rate and a higher rate.

Lower rate

The 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

The higher rate applies to all other income.

Provincial and territorial tax rates (except Quebec and Alberta)

The following table shows the income tax rates for provinces and territories (except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA ).

Provincial and territorial lower and higher tax rates not including Quebec and Alberta
Province or territory Lower rate Higher rate
Newfoundland and Labrador 4% 14%
Nova Scotia 3% 16%
Prince Edward Island 4.5% 16%
New Brunswick 4.5% 12%
Ontario 4.5% 11.5%
Manitoba nil 12%
Saskatchewan 2% 12%
British Columbia 2.5% 11%
Yukon 4% 15%
Northwest Territories 4% 11.5%
Nunavut 4% 12%
Note

These rates are in effect January 1, 2014, and may change during the year.

For more information, go to Dual tax rates.

Forms and publications

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