Corporate Tax in Canada

Overview by
Tax Base For Resident and Foreign Companies
All firms which run a company in Canada or own Canadian goods are liable for tax. Resident or non-resident companies are taxed on their net turnover, after expenses and deductions, if they show a profit.

Tax Rate

Federal Corporate Tax Rate 16.5%
Provincial Corporate Tax Rate Between 10% and 16% according to the province
Tax Rate For Foreign Companies
Foreign companies are subject to the same rate of taxation. On the other hand, they benefit from some exemptions.
Capital Gains Taxation
Long term capital gains are included in taxable income and are thus subject to the same taxation as company profits.
Main Allowable Deductions and Tax Credit
Companies may amortize their capital property up to a certain percentage every year. Also general company expenses and training costs.
For further details, consult the Canadian Legal Information Institute website
Other Corporate Taxes
Business taxes are levied by town councils. Some Canadian town councils do not levy business taxes or may offer certain exemptions. There is no fixed rate, it varies according to the council.

Country Comparison For Corporate Taxation

  Canada OECD United States Germany
Number of Payments of Taxes per Year 8.0 14.2 11.0 16.0
Time Taken For Administrative Formalities (Hours) 131.0 199.3 187.0 215.0
Total Share of Taxes (% of Profit) 29.2 43.0 46.8 48.2

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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