Prince Edward Island – Provincial corporation tax
A decrease in the Prince Edward Island lower rate of corporation income tax has been announced for 2021. See what's new for Prince Edward Island corporations.
The lower rate of Prince Edward Island income tax is:
- 3% effective January 1, 2020
- 3.5% effective January 1, 2019
- 4% effective January 1, 2018
- 4.5% before 2018
This rate applies to taxable income earned in Prince Edward Island that qualifies for the federal small business deduction.
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.
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
- Prince Edward Island (provincial site)
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