Dual tax rates – Example 1
Income earned in one province or territory
Corp X earned all of its income in 2018 from its permanent establishment in Newfoundland and Labrador. Corp X claimed the small business deduction when it calculated its federal tax payable. The income from active business carried on in Canada was $78,000.
The Newfoundland and Labrador lower rate of tax is 3%. The higher rate of tax is 15%.
Corp X calculates its Newfoundland and Labrador tax payable as follows:
Calculation of Newfoundland and Labrador tax payable:
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