Corporation tax 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 15%.
For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is:
- 9% effective January 1, 2019
- 10% effective January 1, 2018
- 10.5% before 2018
Provincial or territorial rates
Generally, provinces and territories have two rates of income tax – a lower rate and a higher 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.
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). These rates are in effect January 1, 2020, and may change during the year.
|Province or territory||Lower rate||Higher rate|
|Newfoundland and Labrador||3%||15%|
|Prince Edward Island||3%||16%|
For more information, go to Dual tax rates.
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