Ontario – Provincial corporation tax

Important notice 

Ontario introduced a new tax credit, the Ontario regional opportunities investment tax credit. See what's new for Ontario corporations

Basic rate

The Ontario basic income tax rate is 11.5%.

Lower rate

The Ontario small business deduction reduces Ontario basic income tax, resulting in the following lower tax rates:

  • 3.2% effective January 1, 2020
  • 3.5% effective January 1, 2018
  • 4.5% before January 1, 2018

If the rate changes during the tax year, you have to base your calculation on the number of days in the year that each rate is in effect.

Reporting the tax

The T2 return includes the following Ontario corporation taxes:

You can use Schedule 500, Ontario Corporation Tax Calculation, to calculate your Ontario basic income tax. Schedule 500 is a worksheet and you do not have to file it with your return.

On line 270 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of basic income tax calculated.

Transitional measures

The Ontario transitional tax debits provide a transition from the Corporations Tax Act (Ontario) for corporations with different income tax attributes for federal and Ontario purposes.

Claiming the credits

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

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