In this page: Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information
Corporate Tax Rate | Federal Corporate Tax Rate: 15% after the general tax reduction (9% for Canadian-controlled private corporations claiming the small business deduction). Provincial Tax Rate: Provinces and territories apply two tax rates - a low rate and a high rate. The low rate applies to business income that qualifies for small business deduction (varying between 0% and 3.2%). The high rate applies to all other income (varying between 11.5% and 16%). For more information, please visit the Canadian government website. |
For information concerning the tax measures taken in order to address the impact of the COVID-19 crisis, please consult the website of the Canada Revenue Agency. |
Non-resident corporations are subject to corporate income tax on taxable capital gains arising on the disposition of taxable Canadian property (50% of capital gains less 50% of capital losses).
Start-up expenses are not deductible, same as for federal, provincial, and territorial income taxes and government-imposed fines and penalties. Mining and oil and gas companies are generally allowed a 100% deduction for grassroots exploration costs, whereas other development costs are deductible at the rate of 30% on a declining-balance basis.
All provinces and territories charge a land transfer tax or registration fee on the purchaser of real property within their boundaries, calculated on the sale price or the assessed value of the property sold at rates varying between 0.02% to 5% (higher rates may apply for non-residents).
Employers need to contribute to social security on behalf of their employees, with rates varying according to the territory. The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2022 is CAD 64,900. For 2022, employers are required to pay, for each employee, government pension plan contributions up to CAD 3,499.80 and employment insurance premiums up to CAD 1,333.84.
Payroll taxes are charged at a maximum rate between 1.95% and 4.3%.
Provinces and territories implement carbon taxes in accordance with the Greenhouse Gas Pollution Pricing Act.
Canada | OECD | United States | Germany | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 8.0 | 10.1 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 131.0 | 163.6 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 24.5 | 41.6 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
A company may also choose to establish a tax year of 12 consecutive months starting on the date the company started its activities. For example: from 1 June to 31 May. A taxation year may not exceed 53 weeks. Once selected, the tax year cannot be changed without approval from the tax authorities.
For further information, consult the dedicated page on the website of the Government of Canada.
Federal Tax Rate (2022) | Progressive from 15 to 33% |
From CAD 0 to CAD 50,197 | 15% |
From CAD 50,197 to CAD 100,392 | 20.5% |
From CAD 100,392 to CAD 155,625 | 26% |
From CAD 155,625 to CAD 221,708 | 29% |
Above CAD 221,708 | 33% |
Provincial Tax Rate | Progressive from 4 to 21.8%. For a full list, consult the Government of Canada website. |
For information concerning the tax measures taken in order to address the impact of the COVID-19 crisis, please consult the website of the Canada Revenue Agency. |
Canadian-resident employees are required to pay government pension plan contributions of up to CAD 3,499.80 and employment insurance premiums of up to CAD 889.54 for 2022. The limits go up to CAD 6,999.60 for self-employed individuals.
Property taxes are levied by municipalities in Canada on the estimated market value of real property within their boundaries, and by provinces and territories on land not in a municipality.
All provinces and territories levy a land transfer tax or registration fee on the purchaser of real property within their territory, with rates varying between 0.02% and 5%.
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Latest Update: April 2023