Provincial/Territorial SIFT tax part

For 2009 and later tax years, the provincial/territorial part of a specified investment flow-through (SIFT) trust's tax is based on its provincial/territorial SIFT tax rate. A SIFT trust may elect to apply this rate to its 2007 and 2008 tax years. If the trust does not elect to do this, the tax factor is 13% for the trust’s tax calculation.

SIFT tax rate

The provincial and territorial SIFT tax rates are determined under subsection 414(3) of the Income Tax Regulations.

A SIFT trust's tax rate for a tax year depends on where the trust has a permanent establishment for that year:

  • If a SIFT trust has no permanent establishment in a province/territory in the tax year, the rate for the trust is 10%
     
  • If a SIFT trust has a permanent establishment in one province/territory and no permanent establishment outside of that province/territory, the rate is the general corporate income tax rate in the province/territory for the tax year

If based on a SIFT trust's tax year, more than one general corporate income tax rate applies, complete Part A of Chart 8 to determine the trust's general corporate income tax rate for each province/territory in which the trust has a permanent establishment.

If a SIFT trust has a permanent establishment in a province/territory in a tax year and a permanent establishment outside that province/territory (whether inside or outside Canada) in that tax year, the general corporate income tax rate will need to be prorated based on the taxable SIFT distributions attributed to each jurisdiction. Use Part A of Chart 8 (if applicable) to determine the trust's general corporate income tax rate for each province/territory, and complete Part B of Chart 8 to determine the trust's provincial/territorial SIFT tax rate

A SIFT trust's taxable distributions are its non-deductible, distributions amount for the tax year.

General Corporate Income Tax Rates

The definition of the general corporate income tax rate in subsection 414(1) of the Income Tax Act Regulations is relevant for determining a SIFT tax rate in relation to subsection 414(3) of the regulations, in particular, paragraph (b), and variable E of the formula in paragraph 414(3)(c).

Under the definition, for the Province of Quebec, the general corporate income tax rate is set at 0%. This will ensure that a SIFT trust or SIFT partnership that has a permanent establishment (as defined in Part IV of the regulations) in Quebec and that is subject to Quebec's provincial SIFT tax for amounts attributable to that permanent establishment, will not be subject to the provincial part of the federal tax for those amounts.

For the territories and the other provinces, the general corporate income tax rate for a tax year means the highest corporate income tax rate applicable to public corporations in a territory or province for that tax year.

Note

For the offshore area of Newfoundland and Labrador, the laws of that province apply. For the offshore area of Nova Scotia, the laws of that province apply.

This chart shows the provincial and territorial general corporate income tax rates for the 2006 and later tax years.
Province/territory/other Rate Tax period
Outside Canada 10% 2006 and later years
Quebec 0% 2006 and later years
Newfoundland and Labrador 14% 2006 to December 31, 2015
Newfoundland and Labrador 15% From January 1, 2016, and later years
Prince Edward Island 16% 2006 and later years
Nova Scotia 16% 2006 and later years
New Brunswick 13% 2006 to June 30, 2009
New Brunswick 12%  from July 1, 2009, to June 30, 2010
New Brunswick 11% from July 1, 2010, to June 30, 2011
New Brunswick 10% from July 1, 2011, to June 30, 2013
New Brunswick 12% from July 1, 2013, to March 31, 2016
New Brunswick 14% from April 1, 2016, and later years
Ontario 14% 2006 to June 30, 2010
Ontario 12% from July 1, 2010, to June 30, 2011
Ontario 11.5% from July 1, 2011, and later years
Nunavut 12% from July 1, 2011, and later years
Yukon 15% 2006 to June 30, 2017
Yukon  12%  from July 1, 2017, and later years 
Manitoba 14.5% 2006 to January 1, 2007
Manitoba 14% from January 1, 2007, to June 30, 2008
Manitoba 13% from July 1, 2008, to June 30, 2009
Manitoba 12% from July 1, 2009, and later years
Saskatchewan 17% before July 1, 2006
Saskatchewan 14% from July 1, 2006, to June 30, 2007
Saskatchewan 13% from July 1, 2007, to June 30, 2008
Saskatchewan 12% from July 1, 2008, to June 30, 2017
Saskatchewan  11.5%  from July 1, 2017, to December 31, 2017
Saskatchewan
12% from January 1, 2018, and later years
British Columbia 12% 2006 to June 30, 2008
British Columbia 11% from July 1, 2008, to December 31, 2009
British Columbia 10.5% from January 1, 2010, to December 31, 2010
British Columbia 10% from January 1, 2011, to March 31, 2013
British Columbia 11% from April 1, 2013, to December 31, 2017
British Columbia 12% from January 1, 2018, and later years
Northwest Territories 14% before July 1, 2006
Northwest Territories 11.5 % from July 1, 2006, and later years 
Alberta 11.5 % before April 1, 2006
Alberta 10% from April 1, 2006, to June 30, 2015
Alberta 12% from July 1, 2015, to June 30, 2019
Alberta 11% from July 1, 2019, and later years

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